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The dollar pauses after recovering to a year-long high at the beginning of the week-SABC News

The dollar hit a low this week against key peers on Thursday, taking a break from a rally that raised it to a year’s high, supported by expectations of a faster Fed rate hike.

The dollar index, which measures the currency against six rivals, was almost flat at 94.016 after falling 0.53% on Wednesday, the highest since August 23.

The index reached 94.563 on Tuesday, the highest since late September 2020, after jumping nearly 3% from the beginning of last month.

Policymakers worried that the dollar will be cut and high inflation will continue even after the minutes of the Federal Open Market Committee’s September meeting confirm that stimulus tapering is almost certain to begin this year. It showed that the number is increasing.

US consumer prices rose steadily in September and could rise further amid rising energy prices, pressured the FRB to act faster to normalize policy, Labor Department reports. May be applied.

Inflation at the break-even point in the United States five or five years from now is one of the more stringent indicators of long-term inflation expectations, jumping to 2.59% overnight, the highest level in seven years.

Most Fed officials, including Chair Jerome Powell, have so far argued that price pressures will be temporary.

Money markets are currently priced at about 50/50 odds of the first 25 basis point rate hike by July.

“The US dollar reaction may be an example of’buying rumors and selling facts’,” Joseph Capurso, a strategist at the Commonwealth Bank of Australia, said in a client note.

“We think the FOMC is wrong in assuming a temporary surge in inflation. A more aggressive tightening cycle will support the US dollar in our view.”

The dollar rose 0.11% to 113.37 yen, but returned overnight from its three-year peak of 113.80 yen.

The euro was almost flat at $ 1.1599 since Wednesday, but reached $ 1.1601 for the first time since October 5.

Sterling remained almost unchanged at $ 1.3665, maintaining 0.55% ahead of schedule on Wednesday, approaching this month’s highest level.

Bitcoin has risen to a five-month peak of $ 58,300.

The dollar pauses after recovering to a year-long high at the beginning of the week-SABC News

Source link The dollar pauses after recovering to a year-long high at the beginning of the week-SABC News

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