Dollar falls against yen, Swiss franc as traders weigh China outlook

By Hannah Lang and Harry Robertson

WASHINGTON/LONDON, Dec 29 (Reuters) - The dollar slipped on Thursday after rising in the previous session, with investors on edge at the end of the year as initial optimism over China's reopening fizzled out.

After hitting a one-week high against the yen on Wednesday, which saw the dollar touch 134.40, the greenback hit a session low against the yen on Thursday. The dollar JPY=EBS last fell 1.050% versus the yen to 133.065.

The dollar also fell against the Swiss franc CHF= to as low as 0.9208, the lowest level since March 31. It was last down 0.57% at 0.923.

The euro EUR= edged higher, up 0.3% to $1.064 after falling 0.27% on Wednesday.

Investors are weighing the impact of China's rapid loosening of its strict COVID-19 rules with a surge in new infections.

Following China's removal of its quarantine rule for inbound travelers from Jan. 8, the United States, Japan, India and other countries said they would require COVID tests for travelers from China.

"China is one of the keys I think to 2023 and what happens to the global economy," said Chris Gaffney, president of world markets at TIAA Bank.

"If they can bounce back from the dramatic slowdowns that we've seen, that helps the overall growth on the global scale, but on the other hand, it could also lead to higher energy demand and more demand means higher prices," he said.

The offshore Chinese yuan fell 0.23% versus the greenback at $6.9788 per dollar.

"Many countries adopting an additional layer of testing for travelers arriving from China reflect hobbled resumption of travel amid China's outbreak," Vishnu Varathan, head of economics and strategy at Mizuho Bank, said.

"This might also fuel fears of new strains of COVID that could once again disrupt the global recovery."

But analysts warned against reading too much into price moves amid low trading volumes as markets head into the new year.

"We very much appear to be in drifting mode, awaiting the turn of the year when traders return and we can get the latest thoughts from policymakers and the most up-to-date data," said Craig Erlam, markets analyst at currency platform Oanda.

Gaffney added that markets had historically experienced enhanced volatility at the end of the year because trading volumes are so light.

"When we go into year-end, typically you can have a lot of volatility on the last days because some of the funds will be harvesting losses or making some moves, and even one fund can start to move the markets when they're this thin," he said.

Against a basket of currencies, the U.S. dollar index =USD fell 0.23% to 104.100, having climbed 0.18% in the previous session.

Sterling GBP=D3 rose 0.1% to $1.20290, after slipping 0.11% the previous day. It climbed as high as $1.206 earlier in the session but gave up some of its gains.

The aussie AUD=D3 was last 0.28% versus the greenback at $0.676., while the kiwi NZD=D3 last rose 0.55% versus the greenback at $0.634.


Currency bid prices at 10:00AM (1500 GMT) Description



U.S. Close Pct Change


High Bid

Low Bid




Dollar index






+104.4500 +103.8800 Euro/Dollar







+$1.0612 Dollar/Yen






+134.3800 +132.9100 Euro/Yen






+142.6800 +141.6000 Dollar/Swiss







+0.9211 Sterling/Dollar GBP=D3






+$1.2017 Dollar/Canadian CAD=D3






+1.3551 Aussie/Dollar







+$0.6710 Euro/Swiss







+0.9825 Euro/Sterling







+0.8823 NZ







+$0.6299 Dollar/Dollar








+9.8795 Euro/Norway







+10.4999 Dollar/Sweden







+10.4372 Euro/Sweden








World FX rates Link

Reporting by Hannah Lang in Washington and Harry Roberston in
London; Additional reporting by Rae Wee; Editing by Bradley
Perrett, Stephen Coates, Andrew Heavens, Nick Macfie anad Alison

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.