US dollar updated 20-year-old maximums
US dollar on Monday updated 20-year-old maximums. On Friday, the head of the Federal Reserve Power Powell caused an increase in the American currency and a decrease in risky assets. However, options for the euro warn the bulls on USD. The dollar index began a new week with updating the maximums of September 2002 about 109.50. However, then the American currency decreased under the pressure of fixation of profit in long positions.
, the head of the Fed, Jerome Powell, at the end of last week, said that the regulator would continue to increase the rates to combat inflation. Tight Monetary policy, warned Powell, will cause pain to households and enterprises.
, the increase in bets may have “unpleasant costs, but the inability to restore price stability will mean much greater pain,” said the head of the Fed during his speech. After Powell’s performance, expectations were adjusted to the market for further growth at the Fed’s meeting in September. Now the probability of increasing the rate at once by 75 basic points is estimated at about 70.5%.
The assumption that the Fed will begin to reduce bets in mid -2023 are premature. The rates will stay at a high level for a longer period of time, according to Societe Generale. The dollar index this week will reach 110 points, according to Commonwealth Bank of Australia.
euros are traded near cyclic minimums, however, options show that bear mood in relation to a single currency is steadily reduced, writes Bloomberg. ECB can act more aggressively in raising bets at its meeting 8 September. The weakness of the euro has become a key problem for politicians, since it exacerbates the increase in energy prices, which was again emphasized in the last performance of the member of the Ollie Ren Management and Member of the Executive Council Isabelle Shnel.