The Dollar Index, which measures the movement of the dollar against the six major currencies in a basket of currencies. It surged past 106, a 20-year high as investors bought the dollar as a safe-haven currency. Amid concerns about the recession
The dollar was also the strongest in 20 years against the euro as investors feared a recession in the eurozone.
As of 11:18 p.m. PST, the dollar index was up 1.54% to 106.76, while the euro was down 1.67% to 139.03 yen and 1.78% to $1.024. The dollar was 0.09% to 135.81 yen.
Investors are worried about a recession in the US. After the US Federal Reserve (Fed) signaled the economy has entered a recession.
The Atlanta Fed revealed that The latest GDPNow forecast model shows that The US economy contracted 2.1% in the second quarter, from an earlier indication of a 1.0% contraction.
GDPNow forecasts show that the US economy contracted in the second quarter more severely than the 1.6% contraction in the first quarter, indicating that the US economy has entered a recession. because the economy contracted for 2 consecutive quarters
The Atlanta Fed will report new GDPNow forecasts on July 7.
Fed Chairman Jerome Powell said earlier that The Fed is committed to curbing inflation. Although the use of a tightening monetary policy will slow down economic growth. But it will not create a serious risk.
“We are committed to using all the tools we have to bring inflation down. This action is to reduce economic expansion. which despite the risk But I don’t see this as the biggest risk to the economy. More than likely a mistake is a failure to stabilize the price,” Powell said.
The US Institute of Supply Management (ISM) said last week that The U.S. manufacturing index fell to 53.0 in June, the lowest level in two years since June 2020. and lower than analysts’ forecast of 54.9 from 56.1 in May.
The manufacturing index was hit by a slowdown in new orders. This contracted for the first time in two years while employment also declined.
Investors are eyeing the release of the minutes of the Fed’s June 14-15 meeting tomorrow. Including the number of non-farm payrolls on Friday.
Analysts predict that The number of jobs added only 250,000 in June. Below 390,000 positions in May and the unemployment rate is expected to remain stable at 3.6%.