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The U.S. dollar resumed its seemingly relentless march higher in early European trading Thursday, while sterling slumped as the relief rally attached to the Bank of England’s intervention into the bond market dissipated. The Bank of England announced an emergency bond-buying on Wednesday, attempting to shore up the gilt market which had slumped, along with the pound, after the new U.K. government announced substantial tax cuts, likely funding by hefty borrowing.
The U.S. dollar edged higher in early European trading Friday, remaining in demand after the Federal Reserve’s hawkish stance, while the yen was buoyant after the intervention of Japanese authorities. USD/JPY fell 0.1% to 142.28, continuing to fall after a drop of more than 1% on Thursday after Japanese authorities intervened in markets to support the yen for the first time since 1998. The intervention followed the decision of the Bank of Japan to maintain its ultra-easy monetary policy.
The U.S. dollar strengthened in early European trade Friday, while the Chinese yuan broke through a crucial threshold as concerns over rising interest rates and a potential recession dented risk appetite. Both the World Bank and the International Monetary Fund warned late Thursday of an impending global economic slowdown, with Indermit Gill, the World Bank's chief economist, saying he was concerned about "generalized stagflation," a period of low growth and high inflation. Fears of a global recession are growing with many central banks aggressively tightening monetary policy to combat inflation at historic levels.
By Ambar Warrick
The U.S. dollar edged lower in early European trade Tuesday ahead of the release of the hotly anticipated U.S. inflation data, which is likely to set the tone ahead of next week’s Federal Reserve meeting. All eyes Tuesday will be on the release of the August U.S. consumer price index at 08:30 ET (12:30 GMT), which will be the last significant guide of the country’s inflationary pressures ahead of next week’s Fed policy-setting meeting. Analysts expect the headline number to be 8.1%, which would be down from 8.5% in July, with gasoline prices having fallen nearly 10% since last month.
The U.S. dollar dropped sharply in early European trade Friday, after hawkish comments from the European Central Bank prompted traders to reassess global rate hike expectations. Federal Reserve chair Jerome Powell reiterated Thursday that the central bank was "strongly committed" to controlling inflation, a stance that largely cemented the market’s belief that the U.S. central bank will hike by 75 basis points at its next meeting in just under two weeks. The European Central Bank raised its key interest rates by an unprecedented 75 basis points on Thursday and promised further hikes, prioritizing the fight against inflation even as the bloc is likely heading towards a winter recession.
By Ambar Warrick
By Ambar Warrick
By Ambar Warrick
By Ambar Warrick