The price of the US dollar rose in trading on Wednesday, approaching a new record high for the year 2021. The US currency strengthened its gains today, reaching the highest level since April against a basket of currencies. The dollar's rise comes amid concerns about the increasing COVID-19 infections, which have undermined gains sparked by expectations of an interest rate hike, while investors await what the European Central Bank will say to gauge their next move.
The euro hit its lowest levels against the US dollar since April, recording $1.1772 in Asian trading, not far from its lowest price this year of $1.1704. The common currency is expected to find support unless the European Central Bank meets expectations for adjustments towards monetary easing when it meets tomorrow, Thursday.
Risk Decline
Kim Mundy, an analyst at the Commonwealth Bank of Australia, stated: "The result is that the ECB's monetary policy will remain highly accommodative for a longer period, which will suppress the euro." The dollar index rose 0.1% to 93.033, and it may test the peak of 93.439 from March, according to Sean Callow, an analyst at Westpac in Sydney, as the currency seems to benefit from risk aversion when investor concern arises, and from expectations of a rate hike when they feel reassured.
The latest price for the Japanese yen was 109.87 per dollar, and 129.237 per euro, while the British pound recorded $1.3616, dropping below the 20-day and 200-day moving averages, only slightly above the lowest level in five months recorded on Tuesday.
