(RTTNews) - In Asian deals on Wednesday, the U.S. dollar strengthened against most major currencies as weak Asian stocks and a pullback in commodity prices prompted traders to bet on the safe-haven greenback.
Speculation that China may introduce additional tightening measures to curb inflation also boosting demand for safe-haven assets.
The U.S. dollar, Japanese yen and the Swiss franc are considered as safe-haven currencies as these nations have lower lending rates, which help traders to borrow and invest in other countries where returns are higher.
Asian stock markets are mostly down with notable losses today with investors fearing a possible decline in quarterly earnings. A few markets in the region showed some strength early in the session, but faltered soon due to fairly heavy selling amid a slew of earnings reports. A flat close on Wall Street overnight and a decline in commodity prices are also weighing on sentiment to a notable extent.
Thus far, Hong Kong's Hang Seng has lost 1.2 percent, China's Shangai composite index fell 0.8 percent, Australia's S&P 200 index dropped 0.8 percent and the All Ordinaries index was 0.7 percent lower, New Zealand's NZX 50 index declined 0.2 percent, South Korea's Kospi slipped 1.1 percent and Taiwan's main index lost 0.4 percent.
The Japanese stock market is closed today in observance of the Greenery Day holiday.
Oil prices declined sharply amid concerns about demand following a steep interest rate hike in India on Tuesday.
Light, sweet crude for June delivery is now down 26 cents or 0.2 percent to $110.79 a barrel.
The dollar rose to 1.4777 against the euro in Asian deals. The next upside target level for the U.S. currency is seen at 1.465. At Tuesday's close, the euro-dollar pair was quoted at 1.4828.
During Asian deals, the dollar climbed to 0.8650 against the Swiss franc. This was up 0.6 percent from yesterday's fresh record low of 0.8599. If the dollar gains further, it may likely target the 0.867 level. The dollar-franc pair closed yesterday's New York session at 0.8615.
The dollar strengthened to a 1-week high of 1.6458 against the pound in the Asian session. On the upside, 1.640 is seen as the next target level for the U.S. currency. The pound-dollar pair was worth 1.6489 at Tuesday's close.
The dollar that rose to 81.12 against the yen in early Asian deals at 7:35 pm ET eased thereafter. As of now, the dollar-yen pair is trading near Tuesday's close of 80.97.
In Asian deals, the U.S. dollar jumped to a 1-week high of 1.0792 against the Australian dollar and a 2-week high of 0.7920 against the NZ dollar. The next upside target level for the greenback is seen at 1.070 against the aussie and 0.785 against the kiwi. The aussie-greenback and the kiwi-greenback pairs were worth 1.0848 and 0.7980, respectively at yesterday's close.
