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© Reuters.
By Peter Nurse
Investing.com – The US dollar loses positions at the start of trading this Friday in Europe, on track for its worst week in over a year, as traders see interest rate hikes from the Federal Reserve this year they have already been taken into account when setting prices.
At 08:55 AM ET, the , which tracks this coin against a basket of six other major currencies, was down 0.1% at 94.735. The index is down more than 1% for the week as a whole, on track for its biggest weekly percentage drop since December 2020.
This selling of the dollar has occurred in a week in which the US annual has risen to levels not seen since the early 1980s and several Fed officials speak of the need for the central bank to raise interest rates. interest and reduce your balance to combat inflation.
The last person in charge of monetary policy to suggest prompt action by the Fed was Governor Lael Brainard, who said during her confirmation hearing before the Senate Banking Committee that “we have a powerful tool and we are going to use it to reduce the inflation”.
The pair is down 0.4% to the 113.72 level, hitting 113.64 for the first time since Dec 21, the is up 0.1% to 1.1467, posting its highest since mid November, and the very risk sensitive , falls to 0.7280, just below almost two-month highs.
“The well-announced rise in US inflation to 7% has been hailed as a selling opportunity by currency investors, with considerable liquidation of long dollar positions causing a weakening generalization of the dollar”, explain the analysts of ING (AS:) in a note.
“EUR/USD technical rally has probably put some more pressure on the dollar in other crosses – whether or not the 1.1500 resistance holds is key for dollar bulls at the moment.”
Elsewhere, the pair is up 0.1% to the 1.3721 level, buoyed by data showing that it grew 0.9% in November, much more than expected.
The British pound has been quite resilient of late, weathering the political turmoil around Prime Minister Boris Johnson after the Bank of England raised interest rates in December. The market is also seriously pricing in another possible hike in February.
The pair is down 0.2% to the 6.3460 level after China posted a record trade surplus in December and in 2021 as stocks beat expectations during a global pandemic while stock growth slowed considerably. .
The pair is largely unchanged at the 1186.81 level after the Bank of Korea raised its benchmark interest rate by 25 basis points to 1.25%, as expected.
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