Image: Reuters Berita 24 English -The U.S. dollar rose to a new one-month high against a group of major currencies on Friday, as Federal R...
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| Image: Reuters |
Berita 24 English -The U.S. dollar rose to a new one-month high against a group of major currencies on Friday, as Federal Reserve officials kept talking up the need for more interest rate hikes before next week's important Jackson Hole symposium.
The dollar index went up 0.12%, from 107.68 to 107.620. 107.68 was the highest it had been since July 18. This week, the index is likely to go up 1.89 percent, which would be its best weekly performance since June 12.
The dollar went up to 136.38 yen for the first time since July 28. The euro went down to $1.00735, which is the lowest it has been since July 15. Sterling dropped to $1.1905, which was its lowest level since July 21.
James Bullard, president of the Federal Reserve Bank of St. Louis, said he is leaning toward supporting a third consecutive 75-basis-point interest rate hike in September. Mary Daly, president of the Federal Reserve Bank of San Francisco, said it would be "reasonable" to raise rates by 50 or 75 basis points next month.
Esther George, president of the Kansas City Fed, said that she and her colleagues won't stop tightening policy until they are "completely convinced" that inflation is going down.
Ray Attrill, the head of currency strategy at National Australia Bank in Sydney, wrote in a client note that the dollar is "smartly higher." This is because central bank officials "all made clear the Fed still has work to do raising rates," even though they had different ideas about how much.
"It's hard to say for sure why the European currency is weak, even though the case for more weakness on global economic grounds has been clear as day for weeks."
The euro is on track to fall 1.71 percent since last Friday, which would be its worst week since July 8. Sterling is expected to fall by 1.80%, which would be the biggest weekly drop since May 6.
European currencies didn't get a boost from new worries about inflation that made regional central banks feel like they had to keep tightening policy. Instead, they worried about the risk of a recession.
Isabel Schnabel, who is on the board of the European Central Bank, made inflation worries worse by saying that consumer prices could still go up in the short term. On Wednesday, British prices went up by more than 10%.
Even though the Fed has been saying over and over that rates need to go up, the odds of another huge 75 basis point hike next month have gone down to 40% in the money markets.
But inflation and job data for August, which are due before the Fed's meeting in September, are likely to change how much they tighten.
At the annual Jackson Hole symposium on August 25–27, Fed Chair Jerome Powell will have a chance to tell the market what he thinks.
In other news, the Australian dollar fell 0.26% against the US dollar to $0.690, and for the first time since August 5, it reached $0.6898. The New Zealand dollar fell by 0.40 percent to $0.6240 after falling to $0.6229, which was also its lowest point since August 5.
Bitcoin fell by 2.28 percent and is now worth $22,880.00. At $1,819.44, Ethereum was down 3.09%.
