Wednesday, May 31, 2023
HomeEconomyDollar eases after sharp climb, euro gains on ECB rate hike

Dollar eases after sharp climb, euro gains on ECB rate hike

by Rae Wee

SINGAPORE (Reuters) – The dollar took a breather from Friday’s surge as markets priced in a more hawkish Fed speech, while the euro held on to parity, raising prices Boosting the dollar

Currency moves were muted overnight despite Federal Reserve Chairman Jerome Powell’s reiteration of the central bank’s aggressive stance on inflation, which strengthened the dollar’s dominance.

The euro rose 0.43% to $1. 52, down slightly from a 20-year low of $0. 9864 touched earlier this week as speculators took profits amid crowded shorts

ECB raised key interest rates on Thursday by an unprecedented level 55 basis points and pledged further rate hikes to fight inflation, even as the group may be heading towards a winter recession and gas rationing.

The single currency is on track to edge up 0.9% kly gains, ending a three-week losing streak, but still down more than % .

Meanwhile, GBP last gained 0.43% to $1. 1547, reversing the decline of the previous trading day.

Britain’s longest-reigning monarch and country’s puppet Queen Elizabeth has fallen overnight, sources say. At the age of seventy, passed away peacefully on Thursday at the age of 55.

US dollar index fell by 0.25% to9864 ., at20- 110 of the highest year. .

“Actually, the ECB and Powell kind of canceled each other out, so there was some kind of volatility, but in the end, the ECB didn’t have that much happening Change that feeling,” said Rodrigo Catril, currency strategist at National Australia Bank (OTC: NABZY).

“I think the market is now starting to look ahead to next week’s U.S. CPI, which I think will set the tone for the Fed’s expectations to some extent.”

last fell 0.43% against the Japanese yen to 143.69, but rose nearly 3% this week, the largest weekly gain since June.

Yen falls due to the extreme dovish stance of the Bank of Japan and the fact that the rest of the world, especially the Fed, is too stark to ignore.

Japan’s top currency diplomat said on Thursday that Japan was ready to take action in the market, not ruling out any options to address “apparently excessive volatility” in the yen.

Officials from the Ministry of Finance, the Bank of Japan (BOJ) and the Financial Services Agency (FSA) met on the same day to discuss the slides.

“Argument from the BOJ that a lower currency is a net beneficiary given that the sharp depreciation of the yen has exacerbated energy prices, and the economy is starting to feel hollow when the cost of living is still rising,” NAB’s Catrill said.

The Australian and New Zealand dollars also rose in early Asian trade, rebounding from overnight losses.

AUD up 0 .29% to $0.1547, while kiwi goes up by 0.0050% to $0.6084, although the two Australian currencies are on track for another week of losses.



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