By Peter Nurse
Investing.com – The dollar gains positions this Thursday, hitting 2021 highs as rising US inflation has raised expectations that the Federal Reserve will start raising interest rates relatively soon.
At 8:55 a.m. (CET), the, which tracks the evolution of this currency against a basket of six other major currencies, rises 0.3% to 95.073, its highest level since June 2020.
The pair is down 0.1% to 1.1473, just above Thursday’s lows of 1.1465, its lowest since July 2020. It is up 0.1% to 114.02. , near three-year highs, after Japanese wholesale inflation hit four-decade highs. Unlike the Fed, neither the European Central Bank nor the Bank of Japan are expected to significantly adjust their monetary policy in the foreseeable future.
The dollar’s advance follows the release on Wednesday of US consumer price data that showed prices rose in October at their fastest annual rate since 1990, raising new questions about whether the Federal Reserve can afford it. to sit idly by at least until the end of next year, as his latest guidelines suggest. The price increases were higher and more widespread than expected, and would have been even worse without the temporary drop in airline ticket prices due to the Delta variant of Covid-19.
The movement of the currency has also been supported by an increase in the yield of the US Treasury bonds; the difference between the yield of US bonds and their equivalents in Japan and Germany has grown as it has not since the beginning of 2020. The bonds had been sold in the United States on Wednesday after a weak auction of 30-year debt.
“The persistence of the inflation outlook continues into 2022, as wage growth tends to accelerate price pressure more broadly, so the Fed will get more and more evidence of the widespread rebound in prices. “Nordea (ST 🙂 analysts say in a note. “This supports our view of a faster-than-anticipated reduction trajectory and three rate hikes in 2022.”
On the other hand, the pair fell 0.1% to the level of 1.3390, registering new lows of 11 months. The UK economy grew 0.6% in September, but estimates for previous months have been revised downward, leaving GDP 0.6% below its February 2020 level. The zloty Pole continued to weaken both vis-à-vis both, in the face of the current confrontation with immigrants on the Belarusian border that has caused the latest diplomatic crisis between Belarus and Europe.
The pair fell 0.2% to 0.7311 after the Australian employment report showed an unexpected rise in unemployment due to lockdown measures from the pandemic.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.