© Reuters. PHOTO: A man counts US dollar bills at a currency exchange office in Beirut, Lebanon on March 23, 2021. REUTERS / Mohamed Azakir / File photo
Author: Cinead Carew
NEW YORK (Reuters) – The euro and pound fell against the dollar on Friday as investors believe interest rates in Europe will stay lower for a longer time, a day after currency markets brushed off the strong performance inflation in the US, which is likely to be temporary.
The last time the rate rose by 0.46% to 90.4790, while the euro fell by 0.53% to 1.2112 dollars.
The day after the European Central Bank stuck to its dovish stance, ECB politician Klaas Noth said flexible fiscal rules would be needed for years as monetary policy remained tight.
“ECB policymakers indicate that inflation rates are well below the levels needed to raise rates,” said Carl Chamotta, chief market strategist at Cambridge Global Payments in Toronto.
“This cuts back on the recent rally in the euro, putting some downward pressure on it. The biggest contributor to the move we’ve seen overnight is (euro) weakness versus idiosyncratic positive dollar strengths. The dollar wins the reverse beauty contest. “
Sterling fell 0.43% to $ 1.4115, further undermined by the rapid spread of the Delta option in the UK, raising fears that much of the country may not be able to fully exit the lockdown on June 21 as planned.
“You are seeing a weakening of the pound sterling due to a possible delayed reopening,” added Chamotte. “This certainly reduces the likelihood of a full and quick recovery, especially on the consumption side. This lowers the estimates and pushes the Bank of England to further tighten policy in the future. “
Forex markets were sluggish all week ahead of Thursday’s US consumer price data, which rose 5% year-on-year in May.
But even though this figure was above expectations, the market reaction was negligible. Investors seem to agree with the Federal Reserve’s assertion that any rise in inflation is temporary and that it is too early to discuss reducing its monetary stimulus.
However, traders were eagerly awaiting the FOMC meeting scheduled for the week ahead. Economists see the central bank will announce a strategy to cut its massive bond buying program in August or September, but don’t expect it to start cutting monthly purchases until early next year, a Reuters poll showed.
Investors, meanwhile, left more risky currencies such as the Australian dollar fell 0.63% against the US dollar and the New Zealand dollar fell 0.92% to hit $ 0.7129.
As far as cryptocurrencies are concerned, bitcoin, which has rebounded slightly in recent sessions, has been trending up 4% over the week and most recently up 1.6% to $ 37,288 per day. However, ether fell 0.4% last time and will drop 9% over the week. Both are still trading well below their previous highs.
Currency purchase prices at 10:18 (1418 GMT)
RIC Description Last US Close Percent,% YTD Change, Interest Rate High Rate Low Rate
USD index 90.4790 90.0740 + 0.46% 0.553% +90.4930 +89.9510
$ 1.2112 $ 1.2176 -0.53% -0.87% + 1.2193 $ + 1.2111 $
109.7600 109.3300 + 0.40% + 6.23% +109.7650 +109.3000
Euro / Yen 132.95 133.08 -0.10% + 4.75% +133.4100 +132.8500
0.8986 0.8946 + 0.44% + 1.56% +0.8986 +0.8933
Sterling / Dollar $ 1.4115 $ 1.4176 -0.43% + 3.32% + $ 1.4185 + $ 1.4114
Dollar / CAD 1.2138 1.2095 + 0.37% -4.67% +1.2140 +1.2080
AUD / USD 0.7704 USD 0.7753 -0.63% + 0.15% + 0.7775 USD + 0.7704 USD
Euro / Swiss 1.0882 1.0892 -0.09% + 0.69% +1.0901 +1.0881
Euro / Sterling 0.8580 0.8587 -0.08% -3.99% +0.8605 +0.8569
NZ $ 0.7129 $ 0.7196 -0.92% -0.71% + $ 0.7210 + $ 0.7130
Dollar / dollar
Dollar / Norway 8.3465 8.2620 + 1.05% -2.77% + 8.3490 + 8.2650
Euro / Norway 10.1096 10.0700 + 0.39% -3.41% +10.1121 +10.0611
Dollar / Sweden 8.3140 8.2484 + 0.35% + 1.43% + 8.3168 + 8.2368
Euro / Sweden 10.0710 10.0362 + 0.35% -0.05% +10.0734 +10.0409