The dollar is weak today As investors sell the dollar as a safe haven Amid forecasts that China’s easing of lockdown measures will boost global economic growth.
As of 10:58 PM PST, the dollar was 0.05 percent to 127.78 yen, while the euro rose 1.05% to 136.43 and rebounded 1.09% to $1.068. The index measures the dollar’s movements against six major currencies in a basket of currencies, minus 0.95% to 102.17.
However, the dollar continued to gain momentum as Federal Reserve Chairman Jerome Powell insisted the Fed would not hesitate to raise interest rates to curb inflation.
The CME Group’s FedWatch Tool indicates that investors are now 100 percent weighed on the Fed’s rate hike of at least 0.50% at the other two monetary policy meetings, in June and July. After the Fed raised interest rates by 0.50% in May for the first time since May 2000. And it was the biggest interest rate hike in more than 20 years.
At the same time, the Fed plans to reduce the size of the balance sheet. (Quantitative Tightening : QT) which will start operations from June. The Fed will reduce its balance sheet by $47.5 billion a month. And after three months, the Fed will increase the balance sheet reduction to $95 billion/month.
The euro is strengthening today. Responding to the trend that the European Central Bank (ECB) will raise interest rates at its monetary policy meetings in July and September.
France’s central bank governor, Francois Villeroy de Gaalhow, said it was highly likely that the ECB would raise interest rates at its July and July monetary policy meetings. Sept.
“If you look at what ECB Chairman Christine Lagarde said this morning, you’ll find that the ECB will definitely raise interest rates. While the ECB’s board members are of the same opinion,” Villeroy said at the World Economic Forum (WEF) conference.
Ms Lagarde previously said the ECB was likely to raise interest rates in July. And deposit interest rates will be positive at the end of the third quarter from the current -0.50% level.