LONDON/NEW YORK: The dollar fell to two-month lows against major currency indices while the pound fell after Federal Reserve officials suggested the central bank was nearing the end of its tightening cycle. hit a 15-month high as wage growth outpaced. expectations.
The dollar fell to a four-week low of 140.17 yen against the yen. Finally, it was traded at 140.75 yen, down 0.4%. The US currency also fell to a two-and-a-half-year low against the Swiss franc, hitting a low of 0.2% at CHF0.8829.
Fed officials said on Monday that the Fed would likely need more rate hikes to keep inflation in check, but the end of the current monetary policy tightening cycle was nearing.
The remarks pushed traders back on expectations about how much more U.S. interest rates need to rise and the dollar fell to a two-month low of $101.66 against a basket of currencies. The dollar index finally fell slightly to 101.89.
“The broader lesson to be learned from yesterday’s series of talks is that the Fed is basically on autopilot for its July meeting, and a series of other announcements between now and Jackson Hole. As it is scheduled, this means the relative importance of tomorrow’s meeting “is underestimated in FX markets,” said chief market strategist at Copey (Toronto). Carl Schamotta said.
Markets are now focused on Wednesday’s US consumer price data, which should provide more clarity on the Fed’s progress in tackling persistently high inflation.
“Market participants should remember that US economic data releases still have the potential to shock. End yields could rise again and the dollar could make a surprising rally,” added Shamotta.
Strengthening of the European currency
The pound surged to a 15-month high of $1.2934 after record wage gains in the UK and mounting pressure on the Bank of England to tighten policy further to curb inflation. It last rose 0.2% to $1.2891.
Danske Bank’s Kirsten Kundby-Nielsen, a forex analyst, said the pound was gaining on strong economic growth and positive expectations of a tightening of policy by the Bank of England.
The euro climbed to a two-month high of $1.1027 and last traded 0.1% to $1.096.
Other European currencies also performed well, with the Norwegian crown hitting a three-month high against the dollar and the Swedish crown hitting a two-week high against the dollar.
At its June meeting, the Swiss National Bank reiterated its readiness to intervene in the exchange market to boost the value of the franc and mitigate the impact of more expensive imports.
In Japan, the yen has risen more than 3% since hitting a seven-month low last month, but this time the yen depreciated above the much-watched 145 yen to the dollar level, prompting traders to call for intervention by Japanese authorities. I was very cautious about the possibility.
Elsewhere, the Australian dollar fell 0.2% to $0.6662 and the New Zealand currency fell 0.5% to $0.6181 ahead of the Reserve Bank of New Zealand’s policy decision on Wednesday.
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Currency bid price at 9:42am (13:42 GMT)
Description RIC Final US Win % YTD % High Bid Low Bid
previous change
session
Dollar Index 101.8900 101.9200 -0.01% -1.546% +101.9600 +101.6600
EUR/USD $1.0985 $1.1001 -0.14% +2.53% +$1.1027 +$1.0977
USD/JPY 140.8100 141.3150 -0.35% +7.40% +141.4550 +140.1700
EUR/JPY 154.67 155.45 -0.50% +10.24% +155.6700 +154.1900
USD/Swiss 0.8830 0.8854 -0.27% -4.50% +0.8856 +0.8813
GBP/USD $1.2899 $1.2860 +0.30% +6.66% +$1.2934 +$1.2858
USD/Canada 1.3274 1.3280 -0.04% -2.03% +1.3289 +1.3246
AUD/USD $0.6654 $0.6677 -0.32% -2.37% +$0.6695 +$0.6653
Euro/Switzerland 0.9698 0.9737 -0.40% -1.99% +0.9753 +0.9687
EUR/GBP 0.8514 0.8553 -0.46% -3.73% +0.8562 +0.8505
$0.6170 $0.6212 -0.65% -2.80% +$0.6224 +$0.6171
dollar/dollar
USD/Norway 10.4100 10.4770 -0.73% +5.98% +10.4790 +10.4000
Euro/Norway 11.4283 11.5250 -0.84% +8.91% +11.5385 +11.4222
USD/Sweden 10.6845 10.7481 -0.74% +2.66% +10.7604 +10.6693
EUR/Sweden 11.7385 11.8255 -0.74% +5.28% +11.8415 +11.7266
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