The greenback has found support in recent sessions, since several Federal Reserve officials reiterated an aggressive stance of monetary tightening ahead of the symposium to be held this week by the US central bank in jackson holeWyoming.
The last of these officials to speak, the president of the Richmond Fed, Thomas Barkin said on Friday that the “momentum” among central bankers was toward faster interest rate hikes.
“The risk is being eliminated after the market received a reality check last week by Fed speakers that an imminent cautious swing is out of the question,” said Michael Brown of Caxton in London.
“Now that investors are clearly expecting a relatively hawkish message from Fed Chairman Powell in Jackson Hole on Friday, it’s a perfect cocktail of risk aversion and a hawkish Fed to push the dollar higher, especially as concerns about growth, about all in Europe, continue to rise,” he added.
the euro fell following Russia’s announcement that it will cut off gas supplies to Europe via the Nord Stream 1 pipeline for three days later this month. Investors fear the cut will exacerbate an energy crisis that has weighed on the common currency in recent months.
The weakness led the euro to briefly dip below $1 for the first time since July 14. The euro was later trading down 1.1% at $0.99345.
The European Central Bank should keep raising rates even if a recession in Germany is increasingly likely, as inflation will remain uncomfortably high until 2023, Bundesbank President Joachim Nagel told a German newspaper.
The yuan fell to its lowest level in almost two years after the Chinese central bank slashed benchmark lending rates and slashed mortgage rates by a larger margin, as Beijing seeks to revive an economy weighed down by a housing crisis and a resurgence in COVID-19 cases. 19.
Source: Ambito
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