The dollar is expected to remain high against other currencies for some time (Getty)
Has risen US dollar to its highest level in 20 years against other major currencies on Monday, after the Federal Reserve Chairman… Jerome Powell That interest rates will remain high for a longer period in order to curb Curb rising inflation.
The dollar index, which measures the value of the US currency against a basket of other currencies, rose to a new high it had not reached two decades ago at 109.48.
This left European currencies in the doldrums even though the hawkish European Central Bank’s hawkish comments boosted expectations of a rate hike in September.
The euro fell 0.25 percent in early European trading to $0.99415, close to its lowest level in 20 years, while the pound fell to its lowest level in two and a half years.
Speaking at a central bank symposium in Jackson Hole, Wyoming, on Friday, Powell said that the Federal Reserve will raise interest rates to the highest level necessary to constrain growth, and will keep them at that level “for some time” to reduce inflation, which has reached more than three times the Fed’s target rate. of two percent.
continuous rise
And the weekly report of the Qatar National Bank (QNB) expected the day before yesterday, Saturday, that the dollar will remain high for some time, suggesting that other advanced economies will remain in a more fragile position in terms of growth, inflation control and geopolitical risks.
The report pointed out that the US dollar index (DXY), a traditional benchmark that measures the value of the US dollar against a weighted basket of six major currencies, has risen by more than 10 percent from pre-pandemic levels, by more than 10 percent in the year to date, and by more than 19 percent compared to the very low levels reached after the pandemic in early 2021.
This included a gain of 17 percent against the euro, 24 percent against the yen, and 13 percent against emerging market currencies.
US Treasury yields also rose, as the two-year bond yields reached their highest level in 15 years at about 3.49 percent, which contributed to strengthening the dollar index.
gold dip
The rise of the dollar and expectations of a US interest rate hike led to a decline in gold prices on Monday to its lowest level in a month.
And gold fell in spot transactions 0.9 percent to $ 1721.16 an ounce (an ounce) by 07:38 GMT, after hitting its lowest level since July 27 at $ 1720.31 earlier in the day. US gold futures fell one percent to $1,732.30.
Markets are now expecting a 75 basis point rate hike at the next Federal Reserve meeting in September.
Among other precious metals, spot silver fell 1.7 percent to its lowest level in a month at $18.56 an ounce. Platinum fell 0.9 percent to $855.89, and palladium settled at $2,110.43.
(Archyde.com, The New Arab)