Euro under pressure as inflation fears send investors to safe-haven dollar


The euro was at $1.044, having lost 0.75% against the dollar the day before, and heading for a monthly decline of 2.7%.

It also fell to its lowest level in 7.5 years against the Swiss franc, 0.99663 francs, as the Alpine currency also benefited from safe-haven flows and was still reeling from the Bank’s surprise rate cut. Swiss national two weeks ago.

Christopher Wong, senior FX strategist at Maybank, attributed the fall in the euro against the dollar to the market turning away from riskier assets after “central bankers warned of sustained inflation and ‘they would prioritize fighting it, which led to a large rebound in the dollar overnight.’

A steady and aggressive global shift to tighter policy has fueled recession fears and rattled financial markets in recent months.

Speaking at the European Central Bank’s annual conference in Sintra, Portugal, US Federal Reserve Chairman Jerome Powell said it was important to bring inflation down, even if it means economic pain , with similar remarks from ECB President Christine Lagarde.

Lower German inflation figures also briefly weighed on the euro, said Ray Attrill, head of currency strategy at National Australia Bank, before “the market realized there were factors there.” specials, that it wasn’t a real downside surprise.”

“The general concern is about what is happening with energy supplies in the euro zone as we approach winter… We are quite cautious on the euro,” Attrill added.

The dollar was also front and center against the other majors, with the pound falling to $1.21225 as losses this week left it poised for a 3.8% monthly decline, while the Australian dollar was struggling $0.6873.

The dollar also hit a new 24-year high of 137 yen overnight, as the gap between a hawkish Fed and a dovish Bank of Japan continues to weigh heavily on the yen, which was last trading. 136.57 yen.

The BOJ is able to keep interest rates low because Japanese inflation is still low by global standards, although even small price increases cause a messaging problem for the central bank.

The Dollar Index, which measures the greenback against six peers, was 105.19, a two-week high.

Bitcoin fell back below the symbolic $20,000 mark due to continued market disruptions. It was also penalized by the rejection, by the United States Securities and Exchange, of a proposal to list a fund traded in cash bitcoin by Grayscale, one of the largest digital asset managers in the world. .



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