The dollar crept back toward recent peaks this Tuesday morning as extended lockdowns in Germany and rising geopolitical tension turned investors cautious, while measures aimed at cooling New Zealand’s red-hot housing market hit the local dollar.
The Turkish lira was also wobbly but a roughly 1% drop was nothing like its 7.5% dive on Monday after President Tayyip Erdogan sacked a hawkish central bank chief, but markets’ relief was offset by worries about fresh lockdowns in Europe. The dollar was 0.1% lower against the safe-haven yen and a bit higher against nearly all other currencies.
The U.S. dollar index also rose 0.1% to 91.890. The kiwi hit a three-month low after the New Zealand government introduced taxes to curb housing speculation, a move some analysts said could reduce the need for monetary tightening and allow interest rates to stay lower for longer. The kiwi fell more than 1.2% and traded at $0.7074 late in the Asia session.
Kiwi bond yields fell, especially at the short end, and the Australian dollar was 0.8% lower at $0.7685. Sterling slipped about 0.2% to $1.3833 and oil linked currencies also fell with crude prices. The Canadian dollar hit a two-week low of 1.2557 per dollar.