The dollar hit a two-decade high on Thursday, following inflation in the United States fell less than the markets expected, which means that the Federal Reserve will go on its way to tighten monetary policy strongly.
The dollar, which is a safe haven, also got support from the decline in global stocks, amid investors’ fears that central banks are behind this trend, in an attempt to curb consumer prices, as growth is already facing risks as a result of the closures that China has implemented for a while to contain the Corona virus.
The dollar index, which measures the performance of the US currency once morest six major currencies, rose by regarding one percent to 104.22, its highest level since December 2002.
The consumer price index rose 8.3 percent on an annual basis in April, down from 8.5 percent in March, but exceeded economists’ expectations of 8.1 percent.
The data suggests that inflation may have peaked, but is unlikely to ease quickly and derail the Fed’s monetary policy plans.
The euro settled at $1.05095 following receiving a boost overnight, as the European Central Bank boosted expectations that it will raise interest rates in July for the first time in more than a decade.
The single European currency fell to its lowest level in more than five years at 1.04695 dollars at the end of last month.
The yen rose 0.2 percent to 129.67 once morest the dollar, moving further away from a more than two-decade low of 131.35 hit on Monday, with 10-year Treasury yields falling to an almost two-week low of 2.862 percent in trading in Tokyo. .
The pound, which also tends to move with risky assets, fell to $1.2211 Thursday for the first time in nearly two years.
The Australian dollar fell 0.76 percent to $0.6885, and earlier reached $0.68795 for the first time in nearly two years. The New Zealand dollar also fell 0.79 percent to $0.6240, which is also the lowest level in nearly two years. (Archyde.com)
