Around 8:15 p.m., the euro yielded 0.69% against the greenback at 1.1329 dollars for one euro.
The dollar posted its biggest gain since the start of the month on Tuesday, rising noticeably against the euro and other currencies, benefiting from the market’s appetite for US government bonds whose yields are at their highest. since the start of the pandemic.
Around 7:15 p.m. GMT, the euro lost 0.69% against the greenback at 1.1329 dollars for one euro.
As investors anticipate a tightening of monetary policy in the United States, the yield on US debt is rising.
Thus rates on 10-year Treasury bills reached a two-year high of 1.84%, as did shorter rates on 2-year bills, which rose to 1.03%, a peak since February 2020.
“The dollar rebounded after a long weekend in the United States, as it is boosted by the prospect that the Fed could hike rates aggressively this year,” noted Joe Manimbo, analyst at Western Union, while market investors are now talking about a possible 50 basis point hike by the Federal Reserve as early as March.
“Given the desire to tighten monetary policy by the US Federal Reserve, while the European Central Bank does not seem ready to act, the recent weakness of the greenback was not justified”, estimated for his part Matthew Ryan, analyst at Ebury.
This sharp rally in the greenback comes a week before the Fed’s next monetary meeting on January 25 and 26, which should pave the way for higher rates.
The American currency rose in particular against the British pound (+0.41% to 1.3590 dollars).
A fall in unemployment in the United Kingdom (to 4.1%, close to its pre-pandemic level in December) did not galvanize the British currency, which awaits inflation data for December on Wednesday.
Finally, the yen held up against the dollar (-0.05% to 114.57 yen) and rose against the euro (+0.75% to 129.80 yen).
The Bank of Japan modestly raised its forecast for 2022/23 (+1.1% against 0.9% previously). It anticipates a rise in consumer prices of 1.1% also in 2023/24, against 1% previously.