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© Reuters.
Por Peter Nurse
Investing.com – The US dollar is firm at the start of trading on Monday in Europe, just below its 20-year highs, as traders turn to this safe haven on slowdown concerns global growth and rising geopolitical tensions.
At 10:15 AM ET, the , which tracks this currency against a basket of six other majors, is broadly flat at 104.597, having briefly crossed the 105 level on Friday, its high. highest since December 2002.
Investors have sought out the greenback as a safe haven due to concerns about the US Federal Reserve’s ability to rein in high inflation without triggering a recession, concerns about slowing growth stemming from the war in Ukraine, as well as the economic impact of China’s lockdown measures to curb its latest outbreak of COVID-19.
Goldman Sachs has added to concerns about US growth this year as the investment bank lowered its forecasts to reflect financial markets shaken by the Federal Reserve’s tightening of monetary policy.
The bank now expects the economy to grow 2.4% this year and 1.6% in 2023, versus 2.6% and 2.2% previously indicated.
The disappointing data from China fueled concerns about the global slowdown. April retail sales slump 11.1% for the year as a whole, nearly double the drop expected, while industrial production falls 2.9% instead of the slight rise expected, illustrating the deep damage that the COVID confinement measures are causing the second largest economy in the world.
Lingering geopolitical tensions over the Ukraine war are also boosting dollar demand, following moves this weekend by Finland and Sweden to join the North Atlantic Treaty Organization.
Moscow has consistently warned of the possible consequences of this decision, especially on the part of Finland, which shares a long border with Russia, so this is likely to exacerbate tensions.
“Market concerns around the combination of the Fed’s monetary policy tightening and the expected global slowdown continue to argue for volatility and instability in risk assets,” say analysts at ING (AS: ) in a note. “Ultimately, this should keep a lot of investors interested in buying the dollar on the dips.”
The pair is down 0.1% to 1.0406, just above Thursday’s 1.0354 level, its lowest since early 2017, while the pair is down 0.2% to 128 .94, recovering after hitting last week’s lows at the 131.35 level.
The pair is down 0.1% to the 1.2243 level, after falling to 1.2156 last week, weighed down by weaker-than-expected Q1 GDP figures.
The UK is to publish its inflation data on Wednesday, and it is expected to show that consumer prices rose as much as 9.1% in April, which would mark the biggest increase in annual inflation since 1980 and the fastest rate of inflation since 1982.
The pair is up 0.1% to 6.7975 and the pair is down 0.7% to 0.6892 as both the yuan and the Australian dollar were hurt by Chinese data from April, somewhat worse than expected.
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