The greenback gained 1.6% against a basket of six major currencies last week after a small but worrying upside surprise in U.S. inflation cast doubt on bets on rate cuts.
He dollar fell slightly from five-month highs on Monday, after its biggest weekly rise since 2022, as the prospect of stubbornly high interest rates in the United States and the escalating conflict in the Middle East lent support.
The greenback gained 1.6% against a basket of six major currencies last week, after a small but worrying upside surprise in the US inflation cast doubt on bets on rate cuts, while the European monetary authorities pointed to a reduction within a few months.
How markets operate in the midst of the Middle East conflict
The day’s currency movements appeared to be based more on the retreat in expectations of Federal Reserve rate cuts than on the weekend attack on Israel by Iran, against which The overall market reaction has been relatively muted.
“There are signs of relief in the markets following Iran’s missile attack on Israel over the weekend,” said Shaun Osborne of Scotiabank. “For now, the conflict remains contained.” The dollar index, which compares the greenback to a basket of six major currencies, fell 0.1% to 105.86, just below Friday’s five-and-a-half-month high of 106.11.
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Markets: how the rest of the currencies operate
He and in was the main loser, setting a new 34-year low, at 153.97 units per dollar, and reviving anticipation of monetary intervention.
He euro, which recorded its biggest weekly percentage drop since late September 2022 last week as the ECB left the door open to a rate cut in June, rose 0.2% to $1.0659 but remained close off the five-month low of $1.06225 hit on Friday.
The lsterling ibra It suffered its biggest weekly percentage decline since mid-July last week, but also rebounded slightly to $1.2493.
Source: Ambito
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