The dollar rose once morest the euro on Thursday following sharp losses the day before, the prospect of action by the Federal Reserve (Fed) supporting a greenback weakened the day before by good economic data in China.
Around 10:30 a.m. GMT (11:30 a.m. in Paris), the American currency gained 0.38% to 1.0627 dollars for one euro.
While the Fed adopted at its last meeting an increase of only 25 basis points in its key rates, a central bank official, Neel Kashkari, said on Wednesday that he was “open” to a rise of 50 points during the next meeting.
Enough to allow a rebound in the dollar in a volatile market, the greenback, a safe haven, also suffering from the health of the Chinese economy following the end of anti-Covid-19 measures.
“We fear that heightened volatility, rather than a strong trend, is on the agenda for the coming weeks,” said ING analyst Chris Turner.
On Friday, the ISM services activity index for February in the United States might indicate the extent to which the resilience of the American economy continues, giving the Fed more leeway to raise its rates.
But according to Societe Generale analysts, “we will have to wait for the employment data next week to examine the extent to which the trend of the strengthening dollar has lost momentum” following the increases in February.
“We think the euro-dollar pair is stabilizing, especially because markets are expecting a lot of bulls in the United States but should expect more in the euro zone,” they said.
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