US Dollar Strengthens Amid China's Economic Boost

14 Oct 2024 , 09:06 AM

The dollar extended its gains in early Monday trades in Asia as a Japanese vacation depleted liquidity, allowing China’s somewhat underwhelming weekend stimulus plans to dominate market attention.

The euro fell 0.13% to $1.0922, while the pound dropped over 0.2% to $1.3043. The dollar remained unchanged against the Japanese yen at 149.20.

The dollar index was at 103.10, up slightly and closing in on last week’s peak, its highest since mid-August, as traders reduced their betting for additional major rate cuts by the Federal Reserve at its remaining meetings this year.

China announced on Saturday that it will “significantly increase” government debt issuance to provide subsidies to low-income individuals, stimulate the housing market, and replenish state bank capital as it seeks to restore sluggish economic development.

Finance Minister Lan Foan told a press conference that further “counter-cyclical measures” will be implemented this year, although he did not specify the scale of the fiscal stimulus being prepared.

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