Around 10 p.m., the greenback approached the threshold of 1.09 dollars for one euro, following having evolved above 1.11 dollars the day before.
The US dollar rose once morest almost all major currencies on Friday, repositioned by the invasion of Ukraine and the prospect of the expected start of a rate hike cycle next week.
Around 9:00 p.m. GMT, the dollar approached the threshold of 1.09 dollars for one euro, following having evolved above 1.11 dollars the day before.
The greenback also rose once morest the yen, at its highest in more than five years (January 2017), as well as once morest the pound sterling, at a 16-month high.
“God knows what’s going to happen in Ukraine over the weekend, (…) so it makes sense that people don’t have a big appetite for risk,” said Marc Chandler, head of market strategy. for the broker Bannockburn Global Forex.
In addition, the recent rise in bond rates, with a yield on 10-year US government bonds, rising above 2% on Thursday for the first time in two weeks, makes the “greenback” even more attractive.
It is all the more so once morest a Japanese rate for the same duration at 0.18% and a German sovereign yield at 0.24%.
“We talk a lot regarding the dollar which will lose ground once morest the yuan, or the fact that the economy will change because we are sanctioning Russia,” said Marc Chandler. “I do not believe. To me, the dollar looks stronger than before.”
Also looming next week, the meeting of the American Central Bank (Fed), Tuesday and Wednesday, which should lead to the first rate hike since December 2018.
The market estimates a 96% chance of a quarter-point hike (0.25 percentage points), and an 87% chance that the Fed will make at least six hikes in 2022.
Despite the announcement this week by the European Central Bank (ECB) of the withdrawal of its asset purchases earlier than expected, “the divergence between the less aggressive ECB and the more proactive Fed is seen as a source of vulnerability for the euro in the future”, estimated, in a note, Joe Manimbo, of Western Union.
