The dollar consolidated its reign this Monday, at its highest levels in almost 20 years once morest the main world currencies, driven by the expectation of an increase in interest rates from the Reserva Federal (Fed) American, what would be known this Wednesday.
(Vea: IMF lowered world economic growth by almost a percentage point).
The Dollar Index, which compares the dollar with a basket of currencies, rose 0.72% to 103.70 points, close to its December 2002 high that it hit once more last Thursday.
The greenback is boosted by the increase in 10 year US Treasury bond yieldswhich briefly hit 3% for the first time since 2018 in New York.
“We were used to a world with very low interest rates, but we are facing a new paradigm of inflation, and we have to acclimatize to what a world with higher rates would be like“, summed up Mazen Issa, of the Canadian investment bank TD Securities.
(Vea: Colombia, among the countries most affected by the rise in food, according to the IMF).
The Fed meets on Tuesday and Wednesday and the markets are waiting for new signals regarding the speed of the monetary tightening that has already started with a first rate hike in March.
99% of investors anticipate a guideline rate hike of 50 basis points to bring reference interest rates between 0.75% and 1%.
These conditions support the dollar.
“We call the dollar ‘king’, and it’s not for nothingMazen Issa concluded.
The euro fell once morest the greenback (-0.36% to 1.0507 dollars per euro). The pound was down 0.69%, trading at $1.2487.
(Vea: The next threat that would put the world in check, according to Bill Gates).
AFP
