The price of the dollar is USD
The US dollar continued to suffer further losses, following several US Federal Reserve officials indicated that they are not in favor of an escalation in the rate of interest rate hikes..
This came as a disappointment to investors who had expected the US Federal Reserve to raise interest rates by 100 basis points on the back of very high inflation data that reached its highest level in 4 decades.
St. Louis Fed President Waller and James Bullard both stated that they are leaning toward a 75 basis point rate increase at the Fed’s July 26-27 meeting, rather than a 100 basis point move, to cushion the negative effects on the economy.
Those comments late last week pushed the dollar back from two-decade highs, giving way to other currencies to rise, with expectations now that the US Federal Reserve will raise interest rates by only 75 basis points.
The European Central Bank is expected to raise interest rates by 25 basis points on Thursday, and investors are waiting to see if it outlines plans to deal with rising bond yields in southern countries, especially Italy.
Meanwhile, other central banks are ramping up interest rate hikes, as the Canadian central bank approved a 100 basis point increase last week, causing losses for the dollar once morest the Canadian currency.
On the other hand, high inflation data in New Zealand, the highest in three decades, fueled speculation that the Reserve of New Zealand will move 75 basis points faster, sending the New Zealand dollar to a 10-day high once morest the dollar.
Commodity currencies also got support following the Chinese authorities announced their support for the real estate sector, which led to a rise in iron and copper ore prices, which added to the losses of the US dollar once morest its Australian counterpart.
dollar now
The dollar index – which measures the performance of the US currency once morest a basket of 6 major currencies – decreased by 0.72% to record 107,211 points.
The euro rose once morest the dollar by 0.80%, recording 1.0161 dollars, while the dollar fell once morest the Japanese yen by 1.28%, recording 138.16 Japanese yen.
On the other hand, the pound sterling once morest the dollar jumped by 1.23% to $1.2001, and the Australian dollar also rose once morest the US dollar by 0.69% to $0.6840.
At the same time, the US dollar fell once morest the Canadian dollar by 0.69% to record 1.2942 Canadian dollars, and the value of the dollar once morest the Swiss franc fell by 0.20% to reach 0.9752 francs.
Analysts’ view of the dollar’s performance
The head of research sees MUFG Derek Halpenny says that with equity markets remaining in positive territory, risk appetite is back, so Fed Governor Christopher Waller’s comments, coming in at a 100 basis point high, had the desired effect.
However, speculators remain optimistic regarding the dollar, as data show CFTC US Weekly Long positions in the dollar are at seven-week highs, while short positions in the euro and yen have grown.
