# Dollar soft as China reopening hopes boost risk sentiment
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-05
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Dollar at 5-month low despite strong U.S. job data; eyes
Meta Description: Check out the latest on the dollar as traders focus on China reopening and U.S. jobs data. Stay informed with Reuters.
URL: https://financedigest.com/dollar-soft-as-china-reopening-hopes-boost-risk-sentimenthtml

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SINGAPORE (Reuters) – The dollar struggled to gain a foothold on Monday and was languishing at five-month lows as traders looked past stronger than anticipated U.S. jobs data, while growing hopes of China reopening boosted risk sentiment.

The dollar index, which measures the [currency against six major](https://www.financedigest.com/u-s-dollar-advances-vs-major-currencies-as-risk-appetite-fades.html "U.S. dollar advances vs major currencies as risk appetite fades") peers including the yen and euro, was down 0.18% at 104.28, its lowest since June 28. The index fell 1.4% last week.

The [dollar initially jumped](https://www.financedigest.com/dollar-jumps-as-powell-flags-higher-terminal-rate.html "Dollar jumps as Powell flags higher terminal rate") on Friday after U.S. data showed that employers added 263,000 jobs in November, well above estimates of 200,000, but gave up the gains as traders booked profits, with some of the [Fed speakers allaying market](https://www.financedigest.com/markets-start-signalling-fed-may-be-going-too-far-amundi.html "Markets start signalling Fed may be going too far – Amundi") concerns.

We [move past](https://www.financedigest.com/moving-past-regulation-the-future-of-open-banking.html "Moving Past Regulation: the future of open banking") U.S. payrolls with only a momentary shake for risky markets,” said Chris Weston, head of research at Pepperstone, noting that the [data supported the ‘soft](https://www.financedigest.com/dollar-skids-after-soft-u-s-economic-data-impact-of-opec-cuts-fades.html "Dollar skids after soft U.S. economic data; impact of OPEC+ cuts fades") landing’ argument and is unlikely to change the Fed’s course, where a 50 basis point hike next week is still the firm default position.

With limited [data to drive this week and no Fed](https://www.financedigest.com/wage-data-dents-dollar-recovery-before-fed-rate-decision.html "Wage data dents dollar recovery before Fed rate decision") speakers, the market may start to think for itself and look at massaging exposures ahead of next week,” Weston added.

[Investor focus](https://www.financedigest.com/tesla-investors-to-focus-on-demand-issues-in-earnings-report.html "Tesla investors to focus on demand issues in earnings report") will firmly be on the U.S. consumer price [inflation data](https://www.financedigest.com/dollar-trims-gains-vs-euro-after-u-s-inflation-data.html "Dollar trims gains vs euro after U.S. inflation data") due on Dec. 13, one [day before the Fed](https://www.financedigest.com/nz-aussie-dlrs-have-busy-day-fed-minutes-loom.html "NZ, Aussie dlrs have busy day, Fed minutes loom") concludes its two-day meeting.

The U.S. [central bank is expected to increase rates by an additional 50 basis points at the meeting](https://www.financedigest.com/dollar-skulks-at-eight-month-low-central-bank-meetings-in-focus.html "Dollar skulks at eight-month low, central bank meetings in focus"). Fed funds futures traders are now pricing for the [Fed’s benchmark rate](https://www.financedigest.com/stocks-euro-gain-amid-divergent-fed-ecb-rate-hike-outlooks.html "Stocks, euro gain amid divergent Fed, ECB rate hike outlooks") to peak at 4.92% in May.

Also, weighing on the dollar was growing hopes of China slowly reopening, with more [Chinese cities announcing an easing of coronavirus curbs](https://www.financedigest.com/were-going-to-be-free-chinese-cheer-as-covid-curbs-are-loosened.html "‘We’re going to be free’: Chinese cheer as COVID curbs are loosened") on Sunday.

The [Australian dollar](https://www.financedigest.com/asian-stocks-make-7-month-highs-australian-dollar-gains-on-hot-inflation.html "Asian stocks make 7-month highs, Australian dollar gains on hot inflation") rose 0.54% to $0.683, while the kiwi was 0.12% higher at $0.642.

The euro was up 0.09% to $1.0547, having gained 1.3% last week. Sterling was last trading at $1.2298, up 0.09% on the day.

The Japanese [yen weakened 0.11% versus the greenback at 134.46 per dollar](https://www.financedigest.com/yen-sinks-as-rates-outlook-diverges-nz-dollar-tumbles.html "Yen sinks as rates outlook diverges; NZ dollar tumbles"), having gained 3.5% on the greenback last week.

(Reporting by Ankur Banerjee in Singapore; Editing by Stephen Coates)


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