Dollar hits 16-month high as inflation fears set it up for best week since June

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TOKYO (Businesshala) – The US dollar headed for its best week in nearly five months against key peers on Friday, the sharpest US inflation in three decades amid bets on raising Federal Reserve interest rates after data this week Shown.

FILE PHOTO: Four thousand US dollars are counted by a banker at a bank in Westminster, Colorado, November 3, 2009. Businesshala/Rick Wilking

The dollar index, which measures the currency against six peers, rose 1.05% this week to hit a new 16-month high of 95.266, the highest since the period ended June 20.

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The euro slipped back to a 16-month low of $1.1436, and sterling fell to $1.3354, its weakest level this year.

“We end the week with a complete breakdown of the USD,” Chris Weston, head of research at brokerage Pepperstone, wrote in a client note. “I see signs of an imminent mean reversal play in USD, but in this inflow, the downside is a buying opportunity.”

Data on Wednesday showed a broad-based rise in US consumer prices last month at the fastest annual pace since 1990, questioning the Fed’s argument that price pressures will be “transient” and fueling speculation that policymakers will be more cautious than before. I will soon raise interest rates. ,

Markets now price the first rate hike by July and the high probability of the second by November.

“We still believe there is room for further strength in market pricing, especially in 2023, which could further support the USD,” Commonwealth Bank of Australia strategist Kimberly Mundy wrote in a client note.

Conversely, “interest rate futures are very aggressive in pricing at the European Central Bank, with rate increases for the next year noting that ECB policymakers are not shaken by their ultra-dovish guidance,” ahead of the euro. Giving scope for weakness, she said.

Traders will be watching inflation readings from a University of Michigan survey, along with data from JOLTS job openings in the global day to day.

New York Fed Chairman John Williams speaks at an online conference, potentially offering a glimpse into how policymakers are reacting to the red-hot inflation print.

Philip Lane, chief economist of the European Central Bank, also speaks on a panel at a separate event.

The dollar hit a high of 114.30 yen on Friday, its strongest since November 1.

It touched a three-week high of 0.92295 Swiss franc.

Swiss National Bank governing board member Andrea Machler said at an event late Thursday that the Swiss franc remained in demand as a safe investment, with market uncertainty rising due to the ongoing COVID-19 pandemic.

The risk-sensitive Australian dollar fell to $0.7277 for the first time in more than a month.

The New Zealand dollar fell to $0.69965, a level not seen since October 14.

In crypto, bitcoin traded south of $65,000, down from a record $69,000 earlier this week.

Looking at an all-time peak of $4,868.79, Ether changed hands on Tuesday around $4,800.

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Currency Bid Price 0553 GMT . Feather

Details RIC Last US Close PCT Change YTD PCT High Bid Low Bid

last change

Session

Euro Dollar

$1.1443 $1.1450 -0.05% -6.33% +1.1453 +1.1436

dollar / yen

114.1750 113.9800 +0.26% +10.64% +114.2900 +114.2500

euro/yen

130.66 130.58 +0.06% +2.95% +130.7400 +130.5400

dollar/swiss

0.9221 0.9210 +0.14% +4.24% +0.9229 +0.9215

sterling/dollar

1.3367 1.3363 +0.04% -2.14% +1.3372 +1.3354

Dollar/Canadian

1.2584 1.2582 +0.02% -1.18% +1.2600 +1.2582

Australian dollar

0.7292 0.7291 +0.01% -5.21% +0.7296 +0.7277

New Zealand

Dollar / Dollar 0.7009 0.7022 -0.18% -2.40% +0.7023 +0.6997

all spots

Tokyo Spot

Europe Spot

instability

BOJ. from tokyo forex market information

Reporting by Kevin Buckland; Editing by Richard Pullin

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