Demand for the riskier currency increased earlier in the week amid ongoing diplomatic efforts to ease tensions in Ukraine and the policy decisions of the Central Bank of China (PBOC).
The US dollar traded mixed against its main rivals at the opening of the Asian session, with the yen continuing to weaken to a nearly six-year low against the greenback.
Against a basket of major currencies, the dollar index traded slightly lower at around 98.27.
The Aussie dollar and the kiwi recorded gains by benefiting as risk -sensitive currencies, as well as being driven by expectations for looser monetary policy in China.
However, the PBOC has just announced to keep its interest rates unchanged, with the one -year principal lending rate (LPR) set at 3.7% and the five -year LPR unchanged at 4.6%.
Russia is still continuing its aggression on Ukraine, which has triggered inflationary pressures with rising commodity prices. At the same time, Turkey says Moscow and Kiev continue to move in negotiations for a ceasefire.
Meanwhile, the bond market remains wary of risks from conflict and tightening by the Federal Reserve (Fed). 10 -year U.S. bond yields show a horizontal movement around the highs since 2019.
The euro and pound are stable with investors' focus now on economic data from the European Zone and the UK this week which will be the next driver for both currencies.
