© Reuters
By Peter Nurse
Investing.com – (Update at 6:20 ET)
The positive Empire State manufacturing index data inspired the dollar index to rise with great strength, as well as the statements of a member of the European Central Bank that he suggested raising interest rates more strongly to give the dollar more strength against the euro, which is the most declining among the major currencies today.
Today, the dollar index records an increase of 0.59% against a basket of foreign currencies, led by the euro, which declined by 0.70% against the US dollar.
Yields are rising strongly now, recording 10-year Treasury yields, up 2.2% to 3.596%.
dollars this morning
The US dollar rose in early European trade on Monday, bouncing off a one-year low over the past week after strong earnings from some Wall Street banking giants eased concerns about the banking sector, raising expectations for a hike.
The dollar index records 101.470, up by 0.21% against a basket of foreign currencies at 12:00 Riyadh time.
The index posted its fifth consecutive weekly loss on Friday, when it fell to a new one-year low of 100.78, following the US’s biggest decline since the start of the pandemic.
With inflation slowing rapidly and Fed policymakers expressing concerns that weakness in the banking sector could lead to a “mild recession” this year, traders are beginning to consider a pause in the central bank’s rate hike cycle in May.
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A shift in the direction of the dollar..banks
However, Friday saw the release of a solid set of first-quarter 2023 earnings for JPMorgan Chase (NYSE:), Citigroup (NYSE:) and Wells Fargo (NYSE:), raising concerns about the banking crisis that It unfolded last month.
In addition, the Fed governor called for further tightening of monetary policy to curb persistently high inflation.
Waller said on Friday that “because financial conditions haven’t tightened significantly, the labor market remains strong and very limited, and inflation is well above target, so monetary policy needs to tighten further.”
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before silence
And in the next few days, investors will have one last chance to hear from more Fed officials before they enter the traditional pre-meeting blackout period, including the New York Fed president, governor, and governor.
Most investors now expect him to raise interest rates by another 25 basis points at the next policy meeting on May 3rd.
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Dollar and foreign currencies
The rate fell 0.1% to 1.0991, retreating from the one-year high seen last week, but the single currency is still sought after on widespread expectations that it will continue to raise interest rates for longer than its US counterpart amid fears it will become The rapid growth of prices is immune.
ECB Governing Council member Joachim Nagel said on Friday that “I don’t think our job – or even the bulk of it – is really finished.” And “Instead, in my opinion, more interest rate hikes will be needed.”
It has raised the bank at each of its past six meetings, and is expected to do something similar in May.
It also rose 0.1% to 1.2419, with the UK set to release its February release on Tuesday, followed a day later, which could determine whether officials decide to raise interest rates by another 25 basis points at their meeting next month.
Elsewhere, it rose to 0.6711, ahead of the release of the Reserve Bank meeting on Tuesday in April, while rising 0.2% to 133.99.
It traded flat at 6.8718, before the main reading for the first quarter scheduled for Tuesday.
