Dollar rules as recession fears hit euro, pound under fire – SABC News

The dollar stood high on Wednesday, holding at a 20-year high against the euro and multiple highs against other major peers as higher gas prices and political uncertainty renewed fears of recession and sent investors into safe currency.

The euro was at $ 1.0262, but a fraction above its night low of $ 1.0236, its weakest since late 2002.

Sterling also traded slightly down at $ 1.1965 just after its 18-month intraday low hit overnight, and the Aussie dollar was under pressure at $ 0.6816.

“There is no investment case to be long euro here at the moment. No one buys euros other than just trading,” said Chris Weston, head of research at Melbourne-based broker Pepperstone.

He pointed to a 100% rally in European gas prices over the last 16 days, which he said had left the European Central Bank with a brutal juggling process.

“You have high inflation where they have to raise rates to, but you now have a trade deficit in Germany and declining growth. It’s not even a matter of recession, it’s a question of how deep that recession will be and how long it will last,” He said.

Traders told Reuters of a large dollar order in early London trading that sparked a chain reaction and accelerated the fall of the euro when it broke through its lows in 2017.

The euro’s tumble, linked to a decline in commodity currencies due to lower oil prices, left the dollar index at 106.46, just outside its own 20-year high overnight.

However, the fall of the euro against the pound was much smaller, slipping only 0.2% on Tuesday, as it was hit by fresh political unrest.

Prime Minister Boris Johnson’s presidency has faltered following the dismissal of two senior British cabinet ministers – Finance Minister Rishi Sunak and Health Secretary Sajid Javid – over his leadership.

In contrast, the Japanese yen recently received some support from some security bidders under fire, with the dollar falling 0.2% to 135.5 yen.

“So, by far, the yen is the currency of choice because it sucks in the mandatory streams of safe haven,” said Matt Simpson, a senior market analyst at City Index.

“Nevertheless, the momentum remains low relative to overnight movements, suggesting that traders stray on the side of caution without venturing into panic mode” in hopes that the horrific data from Europe will not lead to contamination, “he added.

Bitcoin managed to quell the unrest, still hovering around the $ 20,000 level of which it could not break significantly in both directions over the past month.

Dollar rules as recession fears hit euro, pound under fire – SABC News

Source link Dollar rules as recession fears hit euro, pound under fire – SABC News

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