The supermarket dollar The US gains positions this Thursday, May 11, recovering, while the pound sterling remains near its recent highs awaiting the last monetary policy meeting of the Bank of England.
The dollar index that follows the evolution of this currency with respect to a basket of six other main currencies, points up a rise of 0.4% to 101.640, after falling around 0.3% in the previous day.
US inflation data showed a slight decline in April, pointing to a pause in the Federal Reserve’s aggressive tightening cycle.
However, the dollar’s losses were limited as uncertainty over the US debt ceiling persisted, and US Treasury Secretary Janet Yellen warned of the potential global economic damage a default would trigger.
“The current situation is inevitably weighing on confidence in risky assets and supporting the dollar,” say ING analysts in a note. “Now there are growing concerns that it might actually take a sell-off (in equity or currency markets) to break the impasse.”
Elsewhere, GBP/USD is down 0.3% to 1.2588, breaking from Wednesday’s 1-year high of 1.2679; The Bank of England is set to announce its 12th successive rate hike at its policy meeting on Thursday as it tackles double-digit headline inflation, the highest in any major advanced economy.
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“Inflation and wage data last month point to another 25 basis point rate hike from the Bank of Englandadds ING. “But the bank’s recent emphasis on the lagged impact of earlier adjustments suggests that the bar for subsequent moves remains high.”
EUR/USD is down 0.3% to the 1.0946 level, falling back to the middle of its trading range from last month, after recent gains stemming from rising borrowing costs last week.
The ECB’s head of monetary policy, Francois Villeroy de Galhau, said on Wednesday that further rate hikes would be “more marginal”, adding that “it is the future impact of these earlier rate hikes that should allow us, in general, to , reach our goal within two years”.
Source: Ambito
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