Expectations of slowing growth in China and a sharp rate hike by the Federal Reserve boosted demand for the dollar,US dollar indexTuesday (26th) continued to climb more than two-year high, risk aversionGBP、EURWhen the currency is under pressure,GBPIt fell more than 1% against the dollar, the lowest since July 2020.
ICE, which tracks the dollar against a basket of major currencies, late in New York US dollar index (DXY) rose 0.59% to 102.36.
Erik Nelson, a strategist at Wells Fargo, said the dollar’s strength was fueled by concerns that the virus would drag on China’s economic growth.
The Wall Street Journal (WSJ) reported on Tuesday that Chinese President Xi Jinping told officials that even with the ravages of the epidemic, China must ensure that China’s economic growth surpasses that of the United States this year.
However, the market believes that under the influence of the epidemic, China may not be able to achieve its expected goals. Last month, China announced an economic growth target of around 5.5 percent this year.
USD/OffshoreRMBUp 0.28% to 6.5876 RMB.After the People’s Bank of China cut the foreign exchange deposit reserve ratio, offshoreRMBThe trend was volatile and remained near a 17-month low.
EURIt was down 0.7% against the dollar at $1.0638, the lowest since March 2020.Russian-Ukrainian warEURThe impact of the regional economy, and the European Central Bank (ECB) rate hikes slower than the Federal Reserve (Fed) expectations, dragged downEURtrend.
The market expects that the Fed will raise interest rates by 50 basis points at next week’s meeting, and will continue to raise interest rates in June and July.
In addition, after foreign media reported that Russia will end its natural gas supply to Poland from Wednesday (27th),EURfell further.
dollar againstJapanese Yendown 0.71% to 127.22 Japanese Yen. Before the Bank of Japan’s two-day meeting on interest rate policy starting Wednesday,Japanese YenShort covering may occur.
Neil Jones, head of foreign-exchange sales at Mizuho, said market sentiment has shifted, with expectations of further action from officials emerging, and investors will be watching whether the Bank of Japan adjusts its yield curve control band.
Japanese Prime Minister Fumio Kishida on Tuesday urged the central bank to maintain ultra-loose monetary policy, again ignoring the use of interest rate hikes to preventJapanese Yenfurther depreciation.
He had said last week that the central bank’s monetary policy was aimed at achieving its 2 percent inflation target, not manipulating the exchange rate.
GBPIt fell 1.33% to $1.2573 against the dollar, the lowest since July 2020. Continued soaring inflation has heightened concerns about the outlook for Britain’s economy and prompted traders to scale back bets on aggressive rate hikes by the Bank of England (BOE).
Weak retail sales and consumer confidence data underscored that rising inflation is eroding consumers, with negative economic data forcing markets to reassess expectations for an aggressive rate hike path by the central bank, NAB Markets Research said in a report.
The Bank of England will announce its interest rate decision on May 5, and ING said on Tuesday that expectations for the central bank’s tightening policy have slipped to 29 basis points from 38 basis points earlier last week.
Cooling market risk sentiment also dragged downcryptocurrencytrend,bitcoinfell 5.2 percent to $38,065.69,etherShares fell 5.6 percent to $2,825.03, surging yesterday on news of Tesla CEO Elon Musk’s acquisition of TwitterDogecoinalso fell more than 10% before the deadline.
As of Wednesday (27th) Taiwan time about 6:00 Price:
- US dollar indexReported 102.3557. +0.6029%
- EURExchange rate against the US dollar (EUR/USD) at 1 EURAgainst $1.0636. -0.7095%
- GBPExchange rate against the US dollar (GBP/USD) at 1 GBPAgainst $1.2576. -1.3028%
- AUDExchange rate against the US dollar (AUD/USD) at 1 AUDAgainst $0.7123. -0.8353%
- dollar againstCanadian Dollars (USD/CAD) exchange rate at 1.2827 per US dollar Canadian Dollars。+0.7303%
- dollar againstJapanese Yen (USD/JPY) exchange rate is quoted at 127.22 to the US dollar Japanese Yen。-0.7412%