The euro currency suffered losses during Friday trading, recording its lowest level since mid-November, after the European Central Bank hinted that it may reduce interest rates as soon as June, even with US economic data that will likely prompt the Federal Reserve to postpone… That move is for later in the year.
The Japanese yen also fell to a new low, the lowest level in 34 years, against the dollar, which continued to rise, prompting investors to be cautious about indications from officials of possible intervention by Tokyo to support the currency.
The euro fell to $1.0674 in early European trading, and recorded a decline of 0.47 percent in the latest trading, recording only a little more than this level. The single European currency is on track to record a decline of 1.5 percent since Monday, which is the largest weekly decline since the middle of last year.
A higher-than-expected inflation reading in the United States on Wednesday caused investors to quickly adjust their bets on the size and timing of the US Federal Reserve’s rate cut this year, and they now expect the move to take place in September instead of June.
But the European Central Bank indicated yesterday, Thursday, that the start of lowering interest rates is still likely in the summer, given the further decline in inflation in the euro zone.
The dollar index, which measures the performance of the US currency against a basket of six competing currencies, recorded an increase of 0.38 percent in the latest trading and reached 105.67, the highest level in five months. This week, it jumped by 1.3 percent, the largest five-day increase since May 2023.
The pound sterling was trading near its lowest level since December, under pressure from the strength of the dollar, and fell 0.34 percent, recording $1.2511.
The strength of the dollar also put additional pressure on the yen, as it recorded today, Friday, 153.39 yen, the highest level since mid-1990, before it fell slightly to 153.26.
The Japanese currency is on its way to record a weekly decline of more than one percent, and has fallen by about eight percent since the beginning of the year, with interest rates in Japan remaining much lower than their counterparts in the United States.
#Bilad #newspaper #euro #heading #largest #weekly #decline #mid2023