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August 24, 2022
10:55 am
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The dollar retreated from a two-decade high against the euro on Tuesday, after data showed that private sector activity in the United States was weaker than expected in August, raising bets that the Federal Reserve may be less hawkish on its cycle of interest rate increases.
The dollar index, which measures the value of the greenback against a basket of six competing currencies, fell 0.376% to 108.58. Earlier, the index touched 109.27, its strongest level since hitting a two-decade peak in mid-July. Traders are now calculating a 47.5% chance of the US central bank raising interest rates by 50 basis points in September, and a 52.5% chance of a 75 basis point increase.
But that could change when Federal Reserve Chairman Jerome Powell speaks Friday in Jackson Hole, where central bankers from around the world will gather for the Fed’s annual economic seminar.
The euro rose 0.19% against the greenback to $0.99625, recovering from a two-decade low of $0.99005, which fell to it earlier in the session on renewed fears that the energy shock will continue to fuel inflation, which makes it more likely that Europe will slip into recession. . The European currency is down about 12% from its level at the beginning of the year and lost about 3% in August.
On the other hand, the Chinese yuan fell to its lowest level in two years, while the pound touched its weakest level since March 2020. The pound recovered some of its losses after the PMI data in the United States and rose 0.49% against the green currency to $ 1.1825 after it had fallen in earlier today to $1.1718. The Chinese yuan fell to its lowest level in almost two years at 6.853 per dollar.
(Archyde.com)
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