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Dollar Bid on Global Growth Fears After Weak Chinese Data
Published by Jessica Weisman-Pitts
Posted on August 15, 2022
3 min readLast updated: February 23, 2026
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The dollar rose as weak Chinese data revived global recession fears. Commodity-linked currencies, led by the Aussie, fell and the euro slipped. Hawkish Fed signals and near-term U.S. data may further support the greenback.
Dollar bid on global growth fears after weak Chinese data
NEW YORK (Reuters) – The safe-haven dollar bounced on Monday while commodity sensitive currencies including the Australian dollar tumbled after a new batch of disappointing Chinese data bolstered global recession worries.
Chinese industrial output, retail sales and fixed-asset investment all fell short of analyst estimates in data published on Monday, as a nascent recovery from draconian COVID-19 lockdowns faltered.
“Bad data from China also weighs on recession worries for the rest of the world,” said Ipek Ozkardeskaya, market strategist at Swissquote. That pushed down the euro against the greenback, she added.
The U.S. dollar index gained 0.45% to 106.15. The euro eased 0.55% against the dollar to $1.0200.
The Australian dollar, which is sensitive to commodity prices and viewed as a proxy for global growth, dropped 1.37% to $0.7022.
The offshore yuan hit 6.7904, the weakest since Aug. 2, after China’s central bank cut key lending rates in a surprise move to revive demand.
The dollar index has fallen from a 20-year high of 109.29 on July 14 on hopes that the Federal Reserve will slow its aggressive pace of rate increases and that the worst of inflation increases may be behind us.
Concerns that the Fed tightening will send the economy into recession has also helped to send U.S. Treasury yields lower.
However, Fed officials have maintained a hawkish tone and stressed that it is too soon to declare victory on inflation.
“The Fed is telling us they want to tighten financial conditions and the market has eased them, so the Fed is going to have to drive home its point with a larger rate hike,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, adding that he expects the U.S. central bank to raise rates by 75 basis points at its September meeting.
Data this week including industrial production on Tuesday and retail sales on Wednesday could also “help ease fears that the U.S. contracted again,” Chandler said, which would boost the greenback.
A New York state manufacturing survey on Monday showed a sharp decline in activity in August.
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Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Dollar index 106.1500 105.7000 +0.45% 10.962% +106.3400 +105.5400
Euro/Dollar $1.0200 $1.0257 -0.55% -10.28% +$1.0270 +$1.0186
Dollar/Yen 132.7200 133.6100 -0.67% +15.29% +133.5850 +132.5550
Euro/Yen 135.37 136.93 -1.14% +3.88% +137.0700 +135.2900
Dollar/Swiss 0.9437 0.9411 +0.16% +3.33% +0.9466 +0.9409
Sterling/Dollar $1.2082 $1.2135 -0.44% -10.66% +$1.2148 +$1.2051
Dollar/Canadian 1.2930 1.2773 +1.23% +2.27% +1.2934 +1.2774
Aussie/Dollar $0.7022 $0.7122 -1.37% -3.37% +$0.7125 +$0.7012
Euro/Swiss 0.9625 0.9653 -0.29% -7.18% +0.9663 +0.9618
Euro/Sterling 0.8441 0.8451 -0.12% +0.49% +0.8470 +0.8431
NZ $0.6368 $0.6456 -1.34% -6.95% +$0.6456 +$0.6357
Dollar/Norway 9.6965 9.5785 +1.06% +9.88% +9.7070 +9.6040
Euro/Norway 9.8939 9.8095 +0.86% -1.19% +9.9042 +9.8188
Dollar/Sweden 10.3088 10.1833 +0.53% +14.31% +10.3095 +10.1907
Euro/Sweden 10.5106 10.4550 +0.53% +2.70% +10.5176 +10.4644
(Additional reporting by Joice Alves in London; Editing by Kirsten Donovan)
Key Takeaways
- •Disappointing Chinese industrial output, retail sales and investment raised global recession risks.
- •Safe-haven demand lifted the U.S. dollar while the euro and Australian dollar declined.
- •China’s central bank cut key lending rates, weakening the offshore yuan.
- •Fed officials kept a hawkish tone, reinforcing expectations for further tightening.
- •Upcoming U.S. data could bolster the greenback amid signs of slowing manufacturing.
Frequently Asked Questions about Dollar bid on global growth fears after weak Chinese data
1What is GDP?
GDP, or Gross Domestic Product, measures the total economic output of a country. It represents the value of all finished goods and services produced within a country's borders in a specific time period.
2What is a financial crisis?
A financial crisis is a situation where the value of financial institutions or assets drops significantly. It can lead to a loss of confidence in the financial system and often results in economic downturns.
3What is foreign currency?
Foreign currency refers to the money used in other countries, which can be exchanged for the domestic currency. It plays a crucial role in international trade and investment.
4What is central banking?
Central banking is the management of a country's currency, money supply, and interest rates. Central banks oversee monetary policy and aim to maintain financial stability.
5What is economic growth?
Economic growth refers to an increase in the production of goods and services in an economy over a period of time. It is often measured by the rise in GDP.
