He super dollar falls slightly after reaching highs for several months this Wednesday, March 8, as investors adjusted to the prospect of higher interest rates after the Federal Reserve Chairman, Jerome Powellsurprised the markets on the eve with a more aggressive outlook.
Powell said that the Fed is likely to have to raise rates more than expected in response to the recent economic data strength, ensuring that the entity is prepared to take bigger steps if the “totality” of the incoming information suggests that tougher measures are needed to control inflation. On Wednesday he reiterated his arguments before a House panel.
“I don’t think Powell told us anything we didn’t already know.. I think it just shows the sensitivity of the market and the uncertainty about where the top federal funds rate is going to be,” he said. Mark ChandlerChief Market Strategist at Bannockburn Global Forex in New York.
Investors now await the publication Friday of February labor data, looking for confirmation that continued strong job growth supports further rate hikes. The dollar has skyrocketed since it was reported on February 3 that employers added 517,000 jobs in January.
He greenback falls after reaching two-month highs against the euro, and stands at $1.0560. The pound sterling, the Swedish and Norwegian kroner, the yuan and the Canadian, Australian and New Zealand dollars rise after registering lows of several months at the beginning of the round.
“The dollar will have a short-term tailwind in the coming weeks due to a more hawkish Fed,” he said. Dane Cékov, from Nordea. “We see the Fed moving up to 6% in the coming months and it could move faster now after Powell’s comments.”
statements are expected from Swati Dhingra, a member of the Bank of England committee. The director of the European Central Bank, christine lagardeassured that they will do “whatever is necessary” to contain inflation.
The dollar index loses 0.1%, to 105.47 unitsafter rising 1.3% on Tuesday and extending the rise during the opening of this day.
The British pound rises slightly to $1.1845, and the yuan it advances 0.2% to 136.89 units per dollar.
Source: Ambito

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