2 weeks ago
Forex

Dollar Firms Near 2-Week High as China Lowers Growth Target

Investing.com - The U.S. dollar held within sight of a two-week high against its major peers in early European hours

Investing.com - The U.S. dollar held within sight of a two-week high against its major peers in early European hours on Tuesday, as China cut its 2019 economic growth target, dimming the outlook for global growth.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 96.68 by 3:50AM ET (08:50 GMT), after going as high as 96.74 the previous day, its best level since Feb. 19.

The dollar rose 0.2% to 111.93 against the yen, near a 10-week high of 112.08 on Friday.

China said on Tuesday it was targeting economic growth of 6.0% to 6.5% in 2019, down from the 6.6% growth reported last year, which was already the lowest in decades.

"The environment facing China's development this year is more complicated and more severe," Premier Li Keqiang said at the opening of the annual meeting of China's parliament. "There will be more risks and challenges that are either predictable or unpredictable and we must be fully prepared for a tough battle."

Beijing also offered more stimulus, including cuts in taxes and social security fees, increases in infrastructure investment and lending to small firms.

Growth-sensitive currencies, such as the Australian dollar, the New Zealand dollar and the Canadian dollar all traded near multi-week lows.

Elsewhere, the euro held near the prior session's two-week low amid expectations the European Central Bank is preparing to give banks more cheap, long-term funding at its policy meeting on Thursday. It was last down 0.1% to $1.1325.

"The ECB meeting is unlikely to provide big surprises, but the euro is getting top heavy as the central bank, after all, is expected to strike a dovish tone," said Shin Kadota, senior strategist at Barclays.

Meanwhile, the British pound wallowed near its lowest level in a week as Brexit negotiations were set to continue in Brussels in an attempt to bridge the gaps ahead of the March 29 departure deadline.

-- Reuters contributed to this report