The dollar falls against the euro, the Turkish lira unscrews

Around 11 a.m. in Paris, the euro took 0.20% to 1.1617 dollars for one euro, moving away from the lowest for nearly fifteen months reached Tuesday at 1.1524 dollars.

The dollar accentuated the previous day’s decline against the euro on Thursday, as traders tempered their upward bets on the greenback in recent weeks, while the Turkish lira continued to loose.

Around 11 a.m. in Paris, the euro took 0.20% to 1.1617 dollars for one euro, moving away from the lowest for nearly fifteen months reached Tuesday at 1.1524 dollars.

However, the CPI index released Wednesday by the US Department of Labor reported an acceleration in inflation in September, to 5.4% year on year.

“The dollar has weakened, a reaction like + buy rumor, sell information +,” comments Lukman Otunuga, analyst at FXTM.

The rise in prices is in fact in line with the scenario favored by currency traders since September: the American Central Bank (Fed) should tighten its monetary policy more quickly than expected to limit inflation, which makes the greenback more attractive.

Later in the session, minutes from the Fed’s latest monetary policy meeting confirmed that the institute may cut its asset buyback program “in mid-November or mid-December.”

Since the beginning of September, the euro has weakened by 1.6% against the dollar.

The dollar’s decline over the last two sessions could therefore “suggest concerns among some investors about the growth prospects of the United States, which could suffer from too rapid a tightening of monetary policy and a persistence of inflation. », Warns Lee Hardman, analyst at MUFG, even if he is betting on a recovery of the rise of the greenback.

For its part, the Turkish lira did not benefit from this rise in other currencies against the dollar: the currency reached a new all-time low, at 9.19 pounds per dollar, and traded for 9.15 pounds (- 0.7%).

Faced with galloping inflation of more than 19%, one of the highest in the world, Turkish President Recep Tayyip Erdogan defends a monetary policy of lower rates, in opposition to the economic consensus.

On the night of Wednesday to Thursday, he sacked three members of the monetary committee of his central bank, including one who was the only one to have voted against the cut in the key rate in September, according to the press.

“This shows the president’s strong influence on Turkish monetary policy and the central bank’s lack of independence,” comments Hardman, adding: “The doubt will further increase among investors about the capacity, and the will, to of Turkey to fight inflation ”.

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