Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Euro climbs as ECB eyes rate hikes, dollar slides

Economy May 23, 2022 03:36PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. FILE PHOTO: An employee of a money changer holds a stack of U.S. dollar notes before giving it to a customer in Jakarta, October 8, 2015. REUTERS/Beawiharta 2/2

By Sinéad Carew

NEW YORK (Reuters) - The dollar index fell on Monday while the euro rallied after the European Central Bank indicated a move from negative interest rates, and riskier currencies gained ground along with equities.

ECB President Christine Lagarde said in a blog post that the bank was likely to lift the euro area deposit rate out of negative territory by the end of September and could raise it further if it saw inflation stabilizing at 2%.

After declining last week, U.S. equities followed European stocks higher on Monday. [.N]

The euro's rally came as the dollar fell broadly after already selling off last week. (FRX)

Investors had more appetite for riskier assets on Monday as they reacted to Lagarde's comments and easing worries that a European recession was imminent while the U.S. outlook looked less inspiring, according to Erik Nelson, macro strategist at Wells Fargo (NYSE:WFC), New York.

"We're seeing more optimism around global growth - European growth, Chinese growth, UK growth, and a little bit less optimism about U.S. growth. So the growth divergence theme is really a big thing and moving out of favor for the dollar," Nelson said. 74e746b1-f764-486c-ae7a-83f7512257be2

The euro was the big gainer, last up 1.13% at $1.0687, having risen as much as 3.4% from its multi-year intraday low of $1.0349 on May 13.

The U.S. dollar index, which had hit a two-decade high of 105.01 on May 13, was last down 0.82% at 102.09.

"Investors are still interested in the greenback, but foreign currency pressure to the upside has created a little bit of a headwind for the U.S. dollar," said JB Mackenzie, managing director of futures and forex at Charles Schwab (NYSE:SCHW).

In particular, Mackenzie pointed to the euro's rise after the ECB indication that it would become more hawkish.

"Everybody else has been hiking interest rates. The ECB has been the last one to do that so that was what put pressure on the euro. Now all of a sudden, you're starting to hear that they're going to be changing their policy route," Mackenzie said.

Whether the dollar is taking a breather or keeps falling will depend on news from the U.S. Federal Reserve, according to Mackenzie, who will be watching closely for policy clues in minutes from the Fed meeting, due to be released this week.

The greenback has already soared this year but with expectations for repeated rate hikes already priced in, Wells Fargo's Nelson said it may trade sideways for some time.

Last week speculators' net long positioning on the U.S. dollar slipped, after hitting their highest level since late November in the previous week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.

The Australian dollar, which initially showed a muted reaction to the victory for the center-left Labor Party in national elections at the weekend, was up 0.77% at $0.7106 .


Meanwhile the Swiss franc was gaining against the dollar after Swiss National Bank governing board member Andrea Maechler said in an interview published on Monday that the bank will tighten monetary policy if inflation in Switzerland remains persistently high. The dollar was last down 0.89% against the Swiss franc after hitting its lowest level since late April.

Sentiment around China also helped riskier currencies. Shanghai is edging out of a pandemic-related lockdown, and an unexpectedly big rate cut in China last week reassured investors. Also China will broaden its tax credit rebates, postpone social security payments and loan repayments, roll out new investment projects and take other steps to support the economy, state television quoted the Cabinet as saying on Monday.

The yuan had its best week since late 2020 last week and in offshore markets on Monday firmed to 6.704 per dollar, its strongest since early May. [CNY/]

Geopolitics are also in focus in Asia this week as U.S. President Joe Biden tours the region.


Currency bid prices at 3:09PM (1909 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Dollar index 102.0900 102.9500 -0.82% 6.718% +102.9500 +102.0400

Euro/Dollar $1.0687 $1.0569 +1.13% -5.99% +$1.0697 +$1.0559

Dollar/Yen 127.9150 127.9200 -0.01% +11.11% +128.0550 +127.1600

Euro/Yen 136.70 135.03 +1.24% +4.90% +136.8000 +134.6700

Dollar/Swiss 0.9660 0.9743 -0.89% +5.85% +0.9751 +0.9629

Sterling/Dollar $1.2577 $1.2496 +0.68% -6.98% +$1.2601 +$1.2482

Dollar/Canadian 1.2774 1.2846 -0.55% +1.04% +1.2842 +1.2767

Aussie/Dollar $0.7106 $0.7052 +0.77% -2.24% +$0.7127 +$0.7046

Euro/Swiss 1.0324 1.0289 +0.34% -0.43% +1.0335 +1.0266

Euro/Sterling 0.8495 0.8457 +0.45% +1.13% +0.8504 +0.8434

NZ $0.6463 $0.6410 +0.84% -5.57% +$0.6491 +$0.6400


Dollar/Norway 9.5905 9.7400 -1.64% +8.75% +9.7330 +9.5800

Euro/Norway 10.2510 10.2923 -0.40% +2.38% +10.3123 +10.2207

Dollar/Sweden 9.8115 9.9285 -0.13% +8.80% +9.9711 +9.8023

Euro/Sweden 10.4850 10.4983 -0.13% +2.45% +10.5190 +10.4595

Euro climbs as ECB eyes rate hikes, dollar slides

Related Articles

China growth woes boost dollar, weigh down Aussie
China growth woes boost dollar, weigh down Aussie By Reuters - Aug 16, 2022 3

By Alun John HONG KONG (Reuters) - The safe-haven U.S. dollar hit a three-week high on Tuesday after weak global economic data revived concerns of a global recession. The dollar...

Dollar Edges Higher; Recession Fears Boost Safe Haven
Dollar Edges Higher; Recession Fears Boost Safe Haven By - Aug 16, 2022 3

By Peter Nurse - The U.S. dollar edged higher in early European trade Tuesday, remaining near a one-week high as global recession fears prompted demand for the safe...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Wilks Campbell
Wilks Campbell May 23, 2022 1:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So many photo and messages out confirming the fake lockdown hault.
Wilks Campbell
Wilks Campbell May 23, 2022 1:50AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
do a due diligence before reporting the fake lockdown exit.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email