NEW YORK: The US dollar advanced against a basket of currencies on Thursday, a day after Fed Chair Jerome Powell backed more US rate increases and as a spate of interest rate hikes by several central banks fuelled worries about global growth.
Sterling was volatile, the Swiss franc fell and the Norwegian crown surged on Thursday after the Bank of England (BoE), the Swiss National Bank (SNB) and Norges Bank all hiked their benchmark interest rates.
The slew of rate hikes come a day after Fed chief Powell told lawmakers on Capitol Hill further rate increases were “a pretty good guess” of where the central bank was heading if the economy continued in its current direction. Traders will be watching a second day of testimony from Powell on Thursday.
The dollar index, which measures the currency against six rivals, rose 0.21% to 102.23. Against the yen, the dollar was up 0.5% at 142.645 yen.
The Australian dollar, viewed as a liquid proxy for risk appetite, fell 0.48%.
“I believe the doom and gloom is back as a dominating narrative across markets now,” said Juan Perez, director of trading at Monex.
“It legitimately feels like while a recession may not entirely materialize, stagflation - low economic levels combined with stubborn inflation - is a tale to be had for the second half of the year,” Perez said.
US data on Thursday showed the number of people filing for state unemployment benefits for the first time held steady at a 20-month high last week, remaining elevated for a third straight week in what may be an early indication of a softening labor market.
Comments
Comments are closed.