Around 7:45 p.m., the greenback gained 0.94% once morest the single currency, to 0.9915 euro for one dollar, or 1.0085 dollar for one euro.
The dollar made a breakthrough on Thursday to approach parity with the euro once more, supported by the determination of the American central bank (Fed) to continue its fight once morest inflation in the coming months.
Around 5:45 p.m. GMT, the greenback gained 0.94% once morest the single currency, to 0.9915 euro for one dollar, or 1.0085 dollar for one euro. It thus made its first foray below 1.10 dollars for one euro in three weeks, even advancing to 1.0080 dollars.
“Forex traders are rereading yesterday’s minutes,” ie the minutes of the last Fed meeting, released Wednesday, said Matt Weller of StoneX.
The will of the members of the institution to maintain a restrictive monetary policy, that is to say one that slows down the economy, for a significant period, thus prevailed over their fear of an excessive tightening, also expressed in the document.
For the analyst, “this showers the idea of an imminent reversal” of the trajectory of the Fed’s rates, on which many operators were counting.
Two new US indicators of good performance have accredited the thesis of a robust economy, which seems to be taking the rise in interest rates and the deterioration of the global economy without a jolt.
The new weekly jobless claims were thus significantly below expectations, and the industrial activity index for the Philadelphia region (northeast) came out positive in August when economists anticipated a third negative month of in a row.
Mahir Rasheed of Oxford Economics predicts “continued growth at a moderate pace in the months ahead, with continued strong consumer spending and a still strong job market that will keep the economy from sinking” in a recession.
The euro did not benefit from the statements of Isabel Schnabel, member of the executive board of the European Central Bank (ECB), who suggested, in an interview with Archyde.com, that an increase of half a point of the key rate was foreseeable at the next meeting of the Governing Council, on 8 September.
The official also estimated that even a recession in the euro zone would not be enough to curb the high inflation that the region is currently experiencing.
“It worried currency traders a bit,” according to Matt Weller, because “the credibility of the ECB is at stake”. For the analyst, “there is a possibility that we will find parity next week”. Parity had already been reached in mid-July, for the first time in almost 20 years.
Elsewhere in the foreign exchange market, the Turkish lira fell to its lowest level since December 20, following the Turkish Central Bank decided to cut its key rate from 14% to 13%, as inflation hit 79.6% in July over one year.
“Movement has been limited so far because it looks like the Turkish Central Bank is intervening to prevent further depreciation,” according to Matt Weller, “but its ammunition is limited.”
