The Dollar Down But Near Multi-Month Gains

The dollar was down on Monday morning in Asia but remained near its highest level in more than nine months. Commodity currencies like the Australian dollar remained near multi-month lows over persistent concerns about how the continuing spread of COVID-19 globally could impact economic recovery.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged down 0.17% to 93.352 by 10:27 PM ET (2:27 AM GMT).

The USD/JPY pair inched up 0.02% to 109.82.

The AUD/USD pair gained 0.40% to 0.7163 and the NZD/USD pair was up 0.34% to 0.6848.

The USD/CNY pair edged down 0.15% to 6.4911 while the GBP/USD pair edged up 0.19% to 1.3647.

The continuous surge in COVID-19 will see the U.S. Federal Reserve conduct its annual Jackson Hole symposium online beginning Aug. 26.

Fed Chairman Jerome Powell has maintained his dovish stance to date. However, Dallas Fed President Robert Kaplan provided a potential clue before the symposium’s start, saying that his view of beginning asset tapering soon could be adjusted should the COVID-19 Delta variant continue to spread and impact the economic recovery.

A delay in the Fed’s asset tapering timeline might not necessarily hurt the dollar, even as bets on it happening earlier than expected had boosted the greenback so far, according to some investors.

"This can just as easily play out dollar positive as negative, from a risk sentiment/safe-haven dollar demand perspective," National Australia Bank (OTC:NABZY) head of currency strategy Ray Attrill told Reuters.

The riskier Australian and New Zealand dollars were slowly starting to claw back some of its losses. However, "it remains premature to call an end to this down move" in the Australian dollar, said Attrill said.

The Australian dollar remained close to Friday's nine-and-a-half-month low of $0.71065. Around 60% of Australia's population remains under lockdown as COVID-19 infections remain at record levels. Across the Tasman Sea, New Zealand also continues to deal with its latest COVID-19 outbreak.

Elsewhere in Asia-Pacific, South Korea and Vietnam tightened their COVID-19 restrictions, while Japan tripled COVID-19 tests in a change of strategy to curb its COVID-19 outbreak, with a record number of daily new infections reported on Friday.

The region has been struggling to curb the spread of the Delta variant, with vaccination levels remaining below those in the U.S. and U.K.

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