HomeForex UpdatesGreenback index touches 100 for first time in almost two years By...

Greenback index touches 100 for first time in almost two years By Reuters


FILE PHOTO: U.S. greenback banknotes are displayed on this illustration taken, February 14, 2022. REUTERS/Dado Ruvic//

By Iain Withers

LONDON (Reuters) – The strengthened to 100 for the primary time in almost two years on Friday, supported by the prospect of a extra aggressive tempo of Federal Reserve rate of interest hikes.

The dollar has gained floor on a basket of rivals over the previous month, significantly towards the euro, which has been pressured by investor considerations concerning the financial prices of warfare in Ukraine and a doubtlessly nail-biting election in France.

The greenback index rose as excessive as 100 in early European buying and selling hours, its finest stage since Could 2020. It later misplaced some momentum and was final broadly flat at 99.876.

The index is up 1.4% this week, which might be its greatest improve in a month, backed by hawkish remarks from a number of Federal Reserve coverage makers who’re calling for a quicker tempo of rate of interest will increase to curb fast inflation.

This week’s launch of the minutes of the Fed’s March assembly confirmed “many” contributors had been ready to boost rates of interest in 50-basis-point increments in coming months.

On the opposite aspect of the greenback’s rally, the euro dropped to a brand new one-month low of $1.0848. It was final down 0.2% at $1.0865.

Assembly minutes from the European Central Financial institution printed on Thursday advised its coverage makers are eager to behave to fight inflation, however the eurozone has to date taken a extra cautious tack than different central banks, weakening the euro.

A tightening election race in France between president Emmanuel Macron and far-right candidate Marine Le Pen has added to strain on the euro, elevating investor considerations concerning the future route of the euro zone’s second-biggest financial system, although Macron remains to be forward in polls.

“The upcoming French presidential election, with the primary spherical on Sunday, can also be including to present damaging EUR sentiment,” foreign money analysts at MUFG stated in a be aware.

The greenback prolonged its positive factors towards the Japanese yen, hitting 124.23, its highest in over every week and approaching final month’s close to seven-year excessive of 125.1.

The yen has steadied this month after tumbling in March, however stays beneath strain because the U.S. raises rates of interest and the Financial institution of Japan intervenes within the bond market to maintain charges low.

Sterling misplaced floor versus the greenback, and was final down 0.2% at $1.30475.

In cryptocurrency markets, bitcoin was buying and selling 1% greater at round $43,890.

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