Today, the Dollar hit a 16-month high versus a basket of major peers. However, the upside may not last long. There are many challenges ahead. Dollar Hits Below are a few things you should keep in mind as you plan your next visit to Dollar Hits.
Dollar hits 16-month high against a basket of major peers
The US dollar is near a 16-month high against a basket of its major peers as investors seek safety in the US currency. Investors are increasingly reluctant to invest in riskier assets, as concerns over Europe and trade wars erode confidence. The euro weakened against the greenback, as investors worried about a no-deal Brexit and the standoff between Italy and the European Union over Italy’s budget. Sterling tumbled as fears about Brexit prompted traders to sell the British pound.
th high against a basket of its major peers on Wednesday after a long holiday in the United States. Investors are anticipating that the minutes will show a hawkish spin on the Fed’s future course of policy, which could boost the greenback.
currency hit a 16-month high against
On Monday, the safe-haven currency hit a 16-month high against a basket of six major peers, fueled by inflation concerns, global growth, and monetary policy expectations. Investors were watching U.S. consumer prices this week as the Fed considers the latest data. Consumer prices rose the fastest since 1990, casting doubt on the Federal Reserve’s view that the recent weakness in the US economy is temporary. It also fuelled speculation that the Fed would raise interest rates sooner than previously expected.
Today, the New Zealand dollar eased against the dollar after trading analysts waged that it will hike rates in November. Traders also bet that the recent strong survey of business conditions will prompt a rate hike. The Australian dollar fell 0.38% against the dollar after the Reserve Bank of Australia pared its bond purchases and tweaked its rates outlook. The Reserve Bank also left the door open for another hike before the year 2024.
In Europe, the pound retreated overnight, with the euro falling 0.3 percent. The euro is on track to end the week slightly lower against the dollar. The euro has slumped 2.5% against the U.S. dollar since the start of March, but the recent news may limit the euro’s slide. A stronger U.S. dollar will boost European stocks and bolster the euro’s performance.
Dollar boosted by data that showed U.S. consumer prices rose at the fastest annual pace since 1990
Meanwhile, the number of American consumers filing for unemployment benefits fell to the lowest level in more than 20 years. The easing of these bottlenecks should push prices back down in the coming months.
Inflation fears have helped keep Asian stocks under pressure, and have boosted the dollar. Last month, U.S. consumer prices rose at their fastest pace since 1990, giving the Federal Reserve more justification to tighten policy. The dollar shot higher, while nominal U.S. Treasury yields jumped, even though the underlying data is not as bullish as it appears. Other commodities jumped as well, with bitcoin and gold reaching new records. Oil pulled back from seven-year highs, and the dollar continued to strengthen relative to these currencies.
U.S. Census Bureau released its latest data on U.S.
On Friday, the U.S. Census Bureau released its latest data on U.S. retail sales, which will give the dollar some clues about its direction. It is expected that retail sales rose at a 1.1% annual rate last month, according to Reuters’s poll. The data will also show whether consumer morale in the U.S. is slipping. Meanwhile, a recent decline in the single currency, especially the euro, has boosted the heavily euro-weighted dollar index. The euro’s weakness has also boosted the dollar, as President Christine Lagarde continues to push back against market bets for tightening policy.
The Consumer Price Index (CPI) was higher by 5.1% year-on-year in January 2022 than in December 2021. Higher gasoline prices were used as a base year, which contributed to a slower rate of growth. More details on base-year effects can be found in the March 2022 release. Meanwhile, prices rose faster in six provinces in January 2022 than in December 2021. In Ontario, higher electricity prices were a major contributor.