Around 9:40 p.m., the greenback gained 0.48% against the single currency, to 1.0485 dollars for one euro. It did even better against the pound sterling (+0.89%) and the yen (+1.90%).
The dollar rallied on Monday, after the publication of a better than expected US indicator as well as an article from the Wall Street Journal evoking a more marked monetary tightening than expected by analysts.
Around 8:40 p.m. GMT, the greenback gained 0.48% against the single currency, to 1.0485 dollars for one euro. It did even better against the pound sterling (+0.89%) and the yen (+1.90%).
The activity index in services in the United States in November jumped to 56.5% against 53.7% expected.
“Activity remains strong for now,” Oren Klachkin of Oxford Economics said in a note.
An article in the Wall Street Journal suggested that the US central bank (Fed) could thus increase its key rate further and keep it at a high level for longer.
The author of the article, Nick Timiraos, successfully predicted the last four decisions of the Fed’s Monetary Policy Committee on its key rate, in June, July, September and November.
Operators are now counting on a key rate above 5% by mid-June.
However, if the “greenback”, one of the nicknames of the dollar, recovered on Monday, it quickly came up against technical thresholds, in particular 1.04 dollars against the euro, underlined Marc Chandler, of Bannockburn Global Forex, which he said shows that the general momentum is now against the greenback.
“I don’t think the difference between a rate at 4.75% and 5.25%” at the top of the Fed’s monetary tightening cycle “is the key,” he argues. “People now accept that the Fed will be done with the first half of next year” and no longer give the dollar a premium tied to US monetary policy.
Among the few currencies to face the “buck”, another nickname for the dollar, the Chinese yuan, which fell below 7 yuan to the dollar for the first time in nearly three months.
The Chinese currency is benefiting from the gradual relaxation of health rules in many cities, including Beijing and Shanghai. But for Marc Chandler, this push of the renminbi, the other name of the Chinese currency, could quickly stall.