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

Dollar rises as inflation worries hurt risk sentiment

Economy May 31, 2022 03:40PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. A woman holds Euro banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/Illustration 2/2

By Saqib Iqbal Ahmed

NEW YORK (Reuters) -The U.S. dollar strengthened across the board on Tuesday as Treasury yields climbed and worries over a further acceleration in global inflation depressed investors' risk appetite.

The dollar was supported by demand for safe havens. U.S. stocks fell on Tuesday as soaring oil prices and hawkish comments from a U.S. Federal Reserve official spooked investors.

U.S. Treasury yields climbed on Tuesday, a day after Fed Governor Christopher Waller said the Fed should be prepared to raise interest rates by a half percentage point at every meeting from now on until inflation is decisively curbed.

The U.S. Dollar Currency Index, which tracks the greenback against six other major currencies, was up 0.3% at 101.76, on pace for its best one-day gain in nearly two weeks. The dollar index, up about 6.4% for the year, is down 1.4% for May, on pace for its worst monthly loss in a year.

President Joe Biden told Fed Chair Jerome Powell on Tuesday that he will give the central bank the space and independence to address inflation as it sees fit, according to a top aide.

Tuesday's bounce in the U.S. dollar suggests better support for the dollar index around its 50-day moving average, which the index has been testing over the past couple of sessions, Shaun Osborne, chief currency strategist at Scotia Bank, said in a note.

The dollar index has not closed below its 50-day moving average since mid-February but has drifted closer to it over the last several sessions.

"We think the USD is unlikely to rally significantly and still consider price action to reflect the early stages of a broader reversal in the recent USD bull trend." Osborne said.

For now, the euro remained weak as data on Tuesday showed euro zone inflation hit a record high in May, adding pressure on the European Central Bank as it fends off a recession and looks to curb high prices with gradual interest rate increases in coming months.

Inflation in the 19 countries sharing the euro accelerated to 8.1% in May from 7.4% in April, beating expectations for 7.7% as price growth continued to broaden, indicating that it is no longer just energy pulling up the headline figure.

Against the dollar, the euro fell 0.5% to a five-day low.

News that European Union leaders agreed in principle on Monday to cut most oil imports from Russia by the end of this year sent oil prices higher and offered some support to commodity currencies.

The Canadian dollar touched 1.2653 per dollar, near a one-month high struck overnight, ahead of Wednesday's Bank of Canada meeting at which all 30 economists polled by Reuters expect a 50-basis-point rate hike to 1.50%.

In cryptocurrencies, bitcoin climbed 1.39% to $31,666.45, a near three-week high.

Dollar rises as inflation worries hurt risk sentiment
 

Related Articles

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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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)
William Smith
William Smith May 31, 2022 8:34AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Europe got suckered by a brainwashed clueless 16 year old girls teleprompter speech coached and written by green fools.
Andrei Danaila
Andrei Danaila May 31, 2022 6:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Inflation will only go up in Europe, as long as we do not have energy sources. There is no magic source that can counter-balance the reduction of the Russian supply. Not enough LNG capacity, not enough north African sources, not enough through Turkey.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
or
Sign up with Email