Economy

Dollar Stabilizes Near Three-Month Highs

Dollar Stabilizes Near Three-Month Highs

The dollar stabilized today, Thursday, near its highest level in three months, supported by the message broadcasted by Federal Reserve Chairman Jerome Powell regarding the need for further interest rate hikes, potentially at a faster pace than investors previously anticipated. The yuan declined after China reported an unexpected drop in inflation. During the second day of his testimony before Congress on Wednesday, Powell reaffirmed his message, noting that the discussion about the scope and trajectory of future interest rate hikes is ongoing and will depend on data.

The dollar index fell by 0.1 percent to 105.44 points but remained near the three-month high of 105.88 recorded on Wednesday. It also dropped 0.8 percent against the yen to 136.29, while the euro and the British pound strengthened against it. The euro rose by 0.1 percent to 1.0555 against the dollar, and the British pound increased by 0.4 percent to 1.1885 against the dollar. The pound had lost 1.5 percent of its value against the US currency this week, a bigger loss than the euro, which declined by 0.7 percent, and the yen, which fell by 0.3 percent against the dollar.

The yuan fell after China released data showing the slowest year-on-year inflation in the Consumer Price Index in February, raising doubts about the pace of economic recovery. The Chinese yuan in offshore trading approached the psychologically significant level of seven per dollar, and in the latest transactions, it was down 0.2 percent to 6.981. The Canadian dollar dropped to its lowest level in nearly five months, settling in recent trades at 1.3805 against the dollar. The Australian dollar also decreased by 0.3 percent to 0.6611 against the dollar.

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