Image: Reuetrs Berita 24 English - On Thursday, the dollar's unrelenting ascent was resumed, supported by both expectations for a faste...
 |
| Image: Reuetrs |
Berita 24 English - On Thursday, the dollar's unrelenting ascent was resumed, supported by both expectations for a faster Federal Reserve policy tightening and flows into safe-haven assets amid escalating recessionary fears.
After temporarily breaching the mark overnight, the dollar recorded fresh 24-year highs above 128 yen and moved back toward parity with the euro.
In the meantime, the Singapore dollar and the Philippine peso rose versus their American counterparts after their respective monetary authorities made off-cycle efforts to tighten policy.
After touching 138.015 for the first time since September 1998, the dollar was 0.37 percent higher at 137.935 yen.
To $1.0020, the euro declined by 0.39 percent. On Wednesday, it reached $0.9998 for the first time since December 2002.
Overnight U.S. consumer pricing data revealed that inflation, which was already near four-decade highs, was increasing much more.
In a client note, Commonwealth Bank of Australia analyst Kristina Clifton stated: "The bottom line is that U.S. inflation momentum is building."
She stated that persistently high inflation "increases the possibility that the FOMC continues to hike aggressively and causes a recession." "We anticipate that USD support will continue due to recession fears."
Traders increased their wagers that the Federal Reserve will increase interest rates by 100 basis points at its meeting on July 26–27. It is believed that a rise of at least 75 basis points will occur.
Raphael Bostic, president of the Atlanta Fed, added weight to the rumour by stating that a full-point hike is possible given the higher-than-expected inflation data.
Later, the Bank of Canada shocked the markets with a percentage-point rate, igniting more Fed wagers.
On Thursday, the US dollar rose 0.11 percent against the Canadian loonie, reaching C$1.2293, but only after falling 0.32 percent the previous night.
After the Monetary Authority of Singapore (MAS) tightened policy on Thursday outside of its scheduled meetings to tackle skyrocketing inflation, the U.S. dollar fell 0.56 percent to S$1.3960 and plunged to 1.3929, the lowest since July 1.
The central bank shocked markets by raising interest rates by 75 basis points, causing the dollar to fall as much as 0.52 percent to 56 Philippine pesos.
The New Zealand dollar fell 0.31 percent to $0.61125 and was headed back toward the two-year low of $0.6081 on Wednesday. The central bank's as-expected half-point rate hike that day provided little assistance for the currency.
The jobless rate dropped to a 48-year low, according to data released on Thursday, and prices of the country's main export, iron ore, rose as a result. The Australian dollar was barely changed at $0.67605, wiping off an earlier loss.
The value of the pound dropped by 0.4 percent to $1.1847, returning to a two-year low of $1.18075 set earlier in the week. Data released over night showed that the British economy unexpectedly increased in May, giving it a small reprieve.
