Sharjah24 – Reuters: The dollar rallied to a month-high in Asia on Monday as looming catastrophe at indebted developer China Evergrande added extra nerves to a cautious mood, with investors bracing for the Federal Reserve to take another step towards tapering this week.
In trade thinned by holidays in Japan, China and South Korea, the euro fell 0.1% to $1.1710, its lowest since late August.
The Australian dollar fell 0.5% to a three-week low of $0.7227 while sterling and the kiwi also hit multi-week troughs on the rising greenback. The dollar index rose 0.1% to 93.356, its highest since Aug. 23.
"The U.S. dollar is having a bit of a rebound," said Westpac analyst Imre Speizer, drawing support, he added, both from an expectation of imminent asset purchase reductions from the Fed and from caution as stock market selling gathers pace.
"Everyone is eying the Fed, waiting for a tapering signal."
The yen held its own, edging up 0.1% to 109.88 per dollar, while equity markets dropped with concern that an Evergrande collapse could trigger a broader crisis.
Evergrande, with $300 billion in debts, has a bond interest payment of $83.5 million due on Thursday and said on Sunday it begun repaying some investors with real estate, sparking selling in other developers and its lenders.
The fear is that without a bailout, a messy collapse or liquidation ripples through China's property sector at a time when growth is already looking fragile.
Onshore Chinese markets were shut for the mid-Autumn break but the offshore yuan fell through its 200-day moving average to a three-week low of 6.4848 per dollar.
At 0330 GMT, sterling was down 0.1% at $1.3709 and the kiwi down 0.14% at $0.7024. The dollar also made broad gains against emerging markets' currencies and cryptocurrencies fell.
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