The Federal Reserve Promotes Interest Rate hikes, and the US dollar continues to appreciate

2022-8-31 16:07| Publisher: 2233| see: 302| comment: 0|come from: FTChinese

abstract: The exchange rate of the US dollar against a basket of other currencies is on the verge of rising for the third consecutive month. The US dollar is rising20After the annual high, it is on the verge of rising for the third consecutive month, which clearly reflects the conflicting interest rate and growth prospects of the world's largest economy. The US dollar index that measures the exchange rate of the US dollar against a basket of other currencies ...
The exchange rate of the US dollar against a basket of other currencies is on the verge of rising for the third consecutive month.

The Federal Reserve Promotes Interest Rate hikes, and the US dollar continues to appreciate88 / author: / source:FTChinese

The US dollar is rising20After the annual high, it is on the verge of rising for the third consecutive month, which clearly reflects the conflicting interest rate and growth prospects of the world's largest economy.

The US dollar index, which measures the exchange rate of the US dollar against a basket of other currencies, has risen so far this year14%。 The US dollar continues to climb as the market expects the Federal Reserve to not give up raising interest rates to curb inflation. Federal Reserve Chairman Jay Powell(Jay Powell)Last week at Jackson Hall(Jackson Hole)This was emphasized at the annual seminar.

The appreciation of the US dollar against other currencies also reflects concerns that the surge in European energy prices caused by the Russia Ukraine war will drive up inflation and push economies into recession.

Union InvestmentChristian Kopf, Head of Fixed Income(Christian Kopf)Everything points towards a stronger US dollar, "he added." The US dollar is not related to energy imports, and the impact of rising energy prices (especially in Europe) on the US dollar is not significant

8The month will mark the third consecutive month of appreciation of the US dollar, while the pound and euro respectively fell during the same period7.4%and6.6%The Japanese yen and Swiss franc fell respectively7.1%and1.5%。

The Federal Reserve leads major central banks to actively tighten monetary policy. The rise in US government bond yields pushed up the US dollar as investors sold bonds denominated in other currencies in exchange for higher premiums on US treasury bond bonds.

On Tuesday, the yield of two-year US treasury bond bonds reached3.497%, for2007The highest level since the beginning of the year. The yield of US treasury bond bonds fluctuates with interest rate expectations.

High yields and the accompanying strong US dollar have also harmed emerging market economies. This is partly because capital flows from its assets to the US dollar, but also because many emerging market countries hold debt denominated in US dollars. The strengthening of the US dollar means that debt repayments for these countries will increase, prompting some investors to predict a wave of defaults.

Energy prices in Europe have reached a historic high, and the region is looking to replace Russia's natural gas supply. As businesses and households struggle, the European Union is preparing to announce emergency measures to address the region's rising energy costs.

Rabobank Netherlands(Rabobank)foreign exchangeStrategy Director Jane Foley(Jane Foley)When it comes to other major currencies, they seem unable to launch decent resistance against the US dollar in this very bad context. If you sell the US dollar, what do you want to buy

This pressure is unlikely to ease soon. U.S.A7Monthly year-on-year inflation rate reached8.5%Slightly lower than last month, but the Federal Reserve still focuses on2%On the inflation target. european union8The monthly inflation data is scheduled to be released on Wednesday.

Last week, Federal Reserve Chairman Powell confirmed his "unconditional" commitment to dealing with high inflation and made hawkish remarks in Jackson Hole, dispelling concerns that the Federal Reserve would soon ease monetary tightening policies.
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