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 Gains, Euro Struggles to Hold ECB-inspired Gains

Forex Mar 11, 2022 03:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse

Investing.com - The U.S. dollar edged higher Friday, boosted by strength against the Japanese yen, while the euro pushed higher following the hawkish turn by the European Central Bank. 

At 3 AM ET (0800 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 98.627.

USD/JPY rose 0.5% to 116.70, climbing to its highest level since January 2017, and up 1.5% this week, its biggest weekly gain since October.

This move follows Thursday’s release of data showing that U.S. consumer prices surged 7.9% year-over-year in February, the largest annual increase in 40 years.

Both the Federal Reserve and the Bank of Japan have policy meetings next week, but while this inflation release all but confirms the Fed will tighten monetary policy in the form of an interest rate hike, the BOJ is set to retain a dovish monetary policy.

EUR/USD edged higher 0.1% to 1.0984, the day after the European Central Bank announced it would be speeding up its plans to tighten monetary policy, phasing out all of its asset purchases in the summer if inflation fails to come down fast enough. 

Still, while the euro is higher, it has struggled to retain most of the gains seen after the announcement. 

“By ending asset purchases sooner than anticipated, the central bank is taking the dangerous step of tightening in the face of slowing growth. Even [ECB President Christine] Lagarde said the risks to growth are to the downside,” said Kathy Lien, an analyst at BK Asset Management.

Analysts from Goldman Sachs stated on Thursday that they expect economic output in the Eurozone to actually shrink in the second quarter, citing the region’s proximity to the war in Ukraine.

ABN Amro now has a base case of EUR/USD falling to parity or even below for the first time in about two decades, with the supply disruptions to key commodities disproportionately hitting the euro area economy and delaying European Central Bank tightening.

Elsewhere, GBP/USD was flat at 1.3081, despite Britain's economy rebounding much more than expected in January, with GDP climbing 0.8% on the month in January after a 0.2% decline in December.

The Bank of England policymakers meet next week and were already widely expected to hike interest rates once more, even before this stronger than expected data.

AUD/USD lost a little ground on Friday, down 0.2% to 0.7345, after the recent strong rally due to higher commodity prices.

Dollar Gains, Euro Struggles to Hold ECB-inspired Gains
 

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 (1)
John Miracle
John Miracle Mar 11, 2022 5:37AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm wetting for my day that I will make my money 💰
Vishal Wagh
Vishal Wagh Mar 11, 2022 5:37AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
 
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