[ad_1]
Risk aversion in the market was strong. On Tuesday (22), the US dollar continued to rise to an 8-week high. The aggressive comments made by Evans, president of the Federal Reserve Bank of Chicago (Fed), strengthened the US dollar. However, as European equities rallied, dollar gains slowed slightly and sub-risk currencies recovered some of their losses.
On Tuesday (22), the US dollar index, which measures the US dollar against six major currencies, rose 0.33% to 93.993. The US dollar index rose to the strongest since April in the past two days. The US dollar is up 0.6% this week. If it exceeds the 94 level, 95.00 will become the upside target.
Investors are still concerned about the threat of the Covid-19 epidemic to the global economic recovery. Kit Juckes, head of currency strategy at Societe Generale, said: “People’s concerns about the epidemic appear to consolidate the safe-haven position of the US dollar, and the index is expected to rebound for some time.”
The president of the Federal Reserve Bank of Chicago, Charles Evans, stated in a videoconference at the Official Forum of Monetary and Financial Institutions in London that without an additional fiscal stimulus bill, the economic recovery of the United States may delay. more, more slowly and even fall into a complete recession. .
Evans, who has always been considered a moderate Fed official, will serve as the voting committee for the Federal Open Market Committee (FOMC) in 2021. Evans said the Fed still needs to discuss new inflation policy targets. He mentioned that “to start raising interest rates before average inflation reaches 2%”, and said that new QE policies may bring an additional boost to the US economy.
Erik Nelson, an analyst at Wells Fargo Securities in New York, said: “In recent months, the Fed has repeatedly hinted that it will not raise interest rates for the foreseeable future. Now, Evans’ statement has prompted investors to move. towards safe haven assets. “
Edward Moya, a market analyst at OANDA in New York, described Evans’s comments as “extreme hawks.” He said: “The sooner the virus is eliminated, the possibility of interest rate hikes will increase, further promoting the dollar’s rally.”
At the same time, Fed Chairman Jerome Powell told a congressional hearing on Tuesday that since the US economy went into recession due to the epidemic, the economy has “improved significantly,” but prospects for recovery remain. uncertain and the Fed should do so when necessary. Act more.
Both Evans and Bauer called for more fiscal stimulus measures to help the economy. However, the death of Supreme Court Justice Ruth Bader Ginsburg last Friday made investors more concerned about whether Congress has the ability to reach agreement on a new round of epidemic stimulus bills.
Wells Fargo’s Nelson said: “Negative economic news has started to flow into financial markets. There is less hope for a new round of fiscal stimulus.”
The euro hit an eight-week low against the US dollar and then recovered some of its losses, while the Swiss franc fell to a seven-week low. Due to concerns about the economic impact of the new round of anti-epidemic measures, the pound remains in a two-month low range.
The epidemic in the UK has yet to subside. Prime Minister Boris Johnson announced Tuesday that he will tighten control measures for the epidemic. The British people must be prepared. The new restrictions can last 6 months.
The exchange rate of the euro against the dollar fell 0.55% to 1.1707 US dollars, the exchange rate of the dollar against the yen resumed its recent decline, falling 0.26% to 104.46.
High-risk currencies expanded their losses in the first hours of trading, the Australian dollar fell to a one-month low, and then European stocks rose. The Australian dollar was flat against the US dollar at 0.7224; the New Zealand dollar rose 0.1% to 0.6676 against the US dollar, reversing the previous decline.
The Reserve Bank of Australia said it is evaluating whether to interfere in the foreign exchange market and weighing negative interest rate policy, which is putting pressure on the Australian dollar.
Prices as of Wednesday (23) at 5:00, Taiwan time:
The dollar index reached 93.993. + 0.33%
The exchange rate of the euro against the dollar was US $ 1.1707 per euro. -0.55%
The pound-to-dollar exchange rate reached US $ 1.2734 per pound. -0.47%
The exchange rate of the Australian dollar to the US dollar was from Australian $ 1 to US $ 0.7169. -0.78%
The exchange rate of the US dollar to the Canadian dollar was C $ 1.3308 per US dollar. -0.05%
The dollar-yen exchange rate reached 104.46 yen per dollar. -0.26%
[ad_2]
