Around 9:10 p.m., the greenback yielded 0.22% against the single European currency, at 1.0404 dollars. Earlier, the “greenback” advanced as high as $1.0350 per euro, not far from its January 2017 peak.
The US dollar was giving itself a moment of respite on Friday, when completing a week that saw it chain multi-year highs against several major currencies, first and foremost the euro, threatened by the specter of parity.
Around 7:10 p.m. GMT, the greenback lost 0.22% against the single European currency, at 1.0404 dollars. Earlier, the “greenback” advanced as high as $1.0350 per euro, not far from its January 2017 peak.
If it went above 1.0341, it would be in virgin territory for 19 years.
The “buck”, one of its many other nicknames, remained boosted, in general, by the increasingly aggressive monetary policy of the American central bank (Fed), in particular by the latest statements by its chairman, Jerome Powell .
Thursday, the one who had just been officially renewed at the head of the institution suggested that the famous increase of 0.75 percentage point in the key rate of the Fed, whose hypothesis had so scared the market, n Wasn’t totally ruled out after all, although he had said the opposite last week.
On the European side, Kit Juckes, an analyst from Société Générale, warns that the disruptions in the supply of Russian gas to Europe, which have already begun, make “substantial the risk of seeing the euro/dollar fall below the parity”.
As it stands, “the euro is cheap”, he says, in a note, “but we cannot buy it”, because the probability of seeing it lose its value again is too high.
“There is a negative tone, which suggests a growing risk of seeing the single currency fall towards parity”, abounds, in a note, Joe Manimbo, of Western Union.
Even helped by several rate hikes from the European Central Bank (ECB), including a possible one as early as July, the euro “would still be burdened with a significant disadvantage in terms of rates against the dollar”, warns the analyst, the Fed having already accumulated a clear lead.
If it maintained its hold on the euro, the dollar “took a little ground” on Friday against currencies deemed riskier, such as the Canadian and Australian dollars, noted Erik Nelson of Wells Fargo.
“I think we’re not done yet” with the rise of the dollar, nevertheless estimated the analyst.
Elsewhere in the forex market, the yuan continued to slide, also against the dollar, to its lowest value in 18 months. Against the greenback, the Hong Kong dollar touched a 38-year low, at 7.85 “HKD” – its acronym – for one US dollar.
“I think the People’s Bank of China is quite comfortable with this movement”, which was “very violent”, commented Erik Nelson. For him, the Chinese authorities should let the currency depreciate further to around 7 yuan to the dollar (currently 6.78), before curbing it.