The strong U.S. dollar rallied on Monday, while commodity-sensitive currencies including the Australian dollar fell after a fresh batch of disappointing Chinese data fueled worries about a global recession.

China’s industrial production, retail sales and fixed investment missed analysts’ estimates in data released on Monday as the recovery from draconian COVID-19 lockdowns slowed.

Commodities, including iron ore, fell on fears of a slowdown in demand from China, which hurt currencies exposed to asset exposure, including the Australian dollar.

“Concerns about Chinese demand for commodities … on the margins, that’s probably contributing to risk aversion,” said Mark Chandler, chief market strategist at Bannockburn Global Forex in New York.

The US dollar index increased by 0.79% to 106.52.

The euro fell 0.97% against the dollar to $1.0157.

The Australian dollar, also seen as an indicator of global growth, fell 1.43% to $0.7021.

The New Zealand dollar fell by 1.45% to $0.6363.

The offshore yuan hit 6.8197, its weakest since May 16, after China’s central bank unexpectedly cut key lending rates to revive demand.

The dollar index fell from a 20-year high of 109.29 on July 14 on hopes that the Federal Reserve will slow its aggressive pace of rate hikes and that the worst of inflation may be behind us.

Concerns that the Fed’s tightening will push the economy into recession also sent US Treasury yields lower.

However, Fed officials maintained a hawkish tone and emphasized that it is too early to declare victory over inflation.

“The Fed is telling us that they want to tighten financial conditions and the market has eased, so the Fed will have to make its case with more rate hikes,” Chandler said, adding that he expects the US central bank to raise rates by 75 basis points at the September meeting.

This week’s data, including industrial production on Tuesday and retail sales on Wednesday, could also “help ease concerns that the U.S. has contracted again,” Chandler said, adding to the greenback.

Confidence among U.S. single-family homebuilders and factory activity in New York state fell in August to their lowest levels since the start of the COVID-19 pandemic, data showed on Monday.

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