FOREX-Dollar is at two-decade high as CPI keeps aggressive US rate hikes on the table

FOREX-Dollar is at two-decade high as CPI keeps aggressive US rate hikes on the table

The data suggested inflation may have peaked, but was unlikely to cool quickly and derail the Fed’s current monetary policy plans. The market is fully priced for at least a half percentage point increase to the policy rate at each of the next two Fed decisions, on June 15 and July 27, according to the CME FedWatch Tool. “The stronger-than-expected U.S. inflation print heightened concerns over the need for the Fed to accelerate its policy tightening path,” Rodrigo Catril, senior currency strategist at National Australia Bank, wrote in a client note. The May CPI data comes five days before the June Fed meeting, and another “shocker” would make a 75 basis-point hike then a “strong possibility,” he said.

On Thursday, the dollar touched a two-decade high as US inflation slowed less than expected, indicating that the Federal Reserve will continue to tighten policy forcefully. The safe-haven buck also benefited from a drop in global shares amid investor concerns that central banks are lagging in their efforts to control consumer prices, with China’s lengthy COVID-19 lockdowns already posing a threat to development. Riskier currencies, such as the Australian and New Zealand dollars, have fallen in tandem with cryptocurrency prices. The dollar index, which compares the greenback to six major currencies, rose 0.1 percent to 104.22, its best level since December 2002. The consumer price index increased 8.3% on an annual basis in April, down from 8.5 percent in March but still exceeding economists’ expectations of 8.1 percent.

The euro was about flat at $1.05095 after receiving a lift overnight as the European Central Bank overnight firmed up expectations that it will raise its policy interest rate in July for the first time in more than a decade. The single currency plumbed a more than five-year low of $1.04695 at the end of last month. The yen continued to garner support from an easing in long-term Treasury yields from a multi-year peak above 3.2% at the start of the week. Japan’s currency added about 0.2% to 129.67 per dollar, pulling further away from the more than two-decade low of 131.35 reached Monday, as the 10-year Treasury yield retreated to an almost two-week low of 2.862% in Tokyo trading on Thursday. The British pound languished as Brexit headlines returned, with the attorney-general for England and Wales advising the government that it would be within its legal rights to scrap large parts of the Northern Ireland protocol, according to the Times newspaper. Sterling, which also tends to move with risk assets, dipped to $1.2211 on Thursday for the first time in almost two years.

The Aussie slumped 0.76% to $0.6885 and earlier reached $0.68795 for the first time in almost two years. New Zealand’s kiwi dropped 0.79% to $0.6240, also an almost two-year low. Bitcoin slid about 8% to $26,645 but stayed above the previous day’s low of $27,757.77, a level not seen since the start of last year. Smaller rival ether was last down almost 14% at a 10-month trough of $1,785. “Risk assets will surely not like (the U.S. CPI data) because it means that it remains far too premature to price out hikes in the fed funds curve,” TD Securities strategists wrote in a research note. “This market is desperate to try to find the put-in risk assets, but this time around, there will be no bailout because central banks are several months too late in tightening.”

Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
Which flagship phone is the professional's real choice: the iPhone 13 Pro Max or the Sony Xperia 1 IV
Which flagship phone is the professional’s real choice: the iPhone 13 Pro Max or the Sony Xperia 1 IV
There’s no word on Australian availability just yet, but we’re not holding out hope for any. Sony usually doesn’t sell its phones in the region.  The iPhone ...
BRICS bank opens India regional office in GIFT City in Gujarat
BRICS bank opens India regional office in GIFT City in Gujarat
Working in close coordination with the NDB Headquarters, the Indian Regional Office will focus on project origination including initial project preparation ...
A vulnerability in the Huawei AppGallery lets you download paid Android apps for free
A vulnerability in the Huawei AppGallery lets you download paid Android apps for free
The latest flaw in Huawei’s app store was discovered by Android developer Dylan Roussel. Essentially, the API of the AppGallery doesn’t offer any protection ...
UNITED STATES-WALL STREET STOCKS END MIXED, TESLA FALLS
UNITED STATES-WALL STREET STOCKS END MIXED, TESLA FALLS
Weighing heavily on the S&P 500, Tesla tumbled after Chief Executive Elon Musk denounced as “utterly untrue” claims in a news report that he sexually ...
The North Dakota Gaming Commission has banned Vegas-style games
The North Dakota Gaming Commission has banned Vegas-style games
Electronic Arts has reportedly discussed being acquired by a number of tech giants, including Disney and Apple. EA is one of the most well-known gaming ...
As base metals end week full of fear, aluminum rises with low supply
As base metals end week full of fear, aluminum rises with low supply
While metals markets were calmer Friday, prices on the London Metal Exchange have endured a dismal few days on fears of rapid monetary tightening as well as ...
Ebrahim Patel believes that the country's industrialization must be accelerated to create a more inclusive economy.
Ebrahim Patel believes that the country’s industrialization must be accelerated to create a more inclusive economy.
“To build a capable State to execute our strategy, we set out in the annual plan about 150 specific actions and indicators,” he said. Patel said the DTIC’s ...
GfK reports UK consumer confidence is at historic low
GfK reports UK consumer confidence is at historic low
GfK’s gauge of economic optimism for the coming 12 months matched a record low hit in April 2020 as the coronavirus pandemic swept the country. While ...
Never use gift cards to pay for anything over the phone
Never use gift cards to pay for anything over the phone
Amid this and other scams, the department issued a warning for Florida Keys residents on Thursday. “NEVER PAY FOR ANYTHING OVER THE PHONE WITH GIFT CARDS. ...
EA reportedly discussed the acquisition or merger with Disney, Apple and other companies
EA reportedly discussed the acquisition or merger with Disney, Apple and other companies
According to a report from Puck (via Kotaku), EA wants to sell the company to the likes of Apple, Amazon, Disney, or one of many other giant corporations. ...
Show next
We will be happy to hear your thoughts

Leave a reply

Compsmag - Latest News In Tech and Business
Logo