The greenback gained 0.53% once morest the single currency, to 1.0339 dollars for one euro. It even sparkled frankly once morest the pound sterling, as well as the Canadian, Australian and New Zealand dollars.
The dollar regained color on Monday, buoyed by its status as a safe haven as well as by resolute statements from members of the American central bank (Fed).
The greenback gained 0.53% once morest the single currency, to 1.0339 dollars for one euro. It even sparkled frankly once morest the pound sterling, as well as the Canadian, Australian and New Zealand dollars.
For Joe Manimbo, of Convera, the marked decline in the pound (1.17%) is explained by “a large movement of risk aversion which resulted in support for safe values, such as the dollar”.
For Mazen Issa, of TD Securities, the decline of the Australian and New Zealand dollars is explained by their reputation as volatile currencies but also because of the privileged relations of these economies with China.
According to the analyst, “the market is trying to understand how to react to developments in China”, where spontaneous demonstrations have been seen in several parts of the country in recent days, to demand an easing of anti-Covid health restrictions and more freedoms in general.
Currency traders are waiting to hear whether this wave of discontent will lead to a faster-than-expected reopening of China or whether “it will lead to a tougher government response,” according to Mazen Issa.
In this context of uncertainty, the yen also did well thanks to its reputation as a safe haven.
The “greenback”, one of the nicknames of the dollar, was also able to count on the declarations of two members of the Fed, Monday.
“There is still work” in terms of monetary tightening, estimated the president of the New York branch, John Williams, for whom curbing inflation “will take time”.
“We still have a long way to go,” said James Bullard, president of the St. Louis branch, for whom the Fed’s key rate must rise at least to a range between 5% and 5.25. %, once morest 3.75% to 4% currently.
“We want to bring inflation under control much faster than in the 1970s,” insisted the man who is considered the hardest member of the Fed in terms of monetary policy.
