Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Dollar Edges Higher; U.K. CPI Climbs to 30-Year High

Currencies Mar 23, 2022 04:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
EUR/USD
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GBP/USD
-0.01%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/JPY
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
AUD/USD
-0.04%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NZD/USD
-0.06%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/CNY
-0.19%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Peter Nurse 

Investing.com - The U.S. dollar edged higher Wednesday, with the Japanese yen weakening, as rising commodity prices and expectations of a faster Federal Reserve tightening cycle continued to drive moves.

At 4:10 AM ET (0810 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 98.558.

The dollar has continued to gain strength from Federal Reserve Chair Jerome Powell’s hawkish speech earlier this week, where he signaled the central bank could hike interest rates by more than 25 basis points at upcoming policy meetings if the policymakers feel it necessary to tame inflation.

The Fed raised the benchmark lending rate by a quarter point at their meeting last week, the first increase since December 2018, and signaled six more hikes of that size this year.

U.S. benchmark 10-year yields rose as high as 2.41% early in the Asian session on Wednesday, its highest level since 2019, providing support for the dollar, given the increasing interest rate differentials offered up by the bonds of the other major countries.

This gap is most obvious when compared with Japan’s debt, with the 10-year JGB yielding just 0.22%, and BOJ Governor Haruhiko Kuroda maintaining that Tokyo must maintain its accommodative monetary policy for some time.

USD/JPY rose 0.2% to 121.09, just below the new six-year high of 121.41 seen overnight.

Also weighing on the yen are the higher commodity prices, and energy prices in particular, with Japan importing the bulk of its energy, widening the country's trade deficit.

“A sharply deteriorating trade position on the back of fossil fuel prices and a still dovish central bank leaves the door wide open for USD/JPY to trade up to 125 over coming weeks,” said analysts at ING, in a note.

Elsewhere, EUR/USD edged lower to 1.1025 with U.S. President Joe Biden heading to Europe later Wednesday for talks with European leaders about Russia's invasion of Ukraine.

He is likely to announce plans for more sanctions on Moscow and will likely put pressure on European leaders to boycott Russian oil.

GBP/USD edged lower at 1.3259 despite British inflation rising to a new 30-year high of 6.2% last month, at the very top end of expectations. The Bank of England lifted interest rates last week, already moving to combat these high inflation levels.

Attention will also be on the U.K. Chancellor's Spring Statement later in the session, amid speculation Rishi Sunak will announce support measures to help consumers suffering from a cost of living crisis.

“That the UK's fiscal position has some room to support the economy may provide a little more room for the Bank of England to hike,” added ING.

AUD/USD dropped 0.1% to 0.7457, NZD/USD fell 0.1% to 0.6954, both handing back recent gains, while USD/CNY rose 0.1% to 6.3753.

Dollar Edges Higher; U.K. CPI Climbs to 30-Year High
 

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.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

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.
 
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