Flight to high quality lifts U.S. greenback to two-year highs; Aussie crumbles By Reuters


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© Reuters. One Euro cash are seen on this illustration taken November 9, 2021. REUTERS/Dado Ruvic/Illustration

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By Saikat Chatterjee

LONDON (Reuters) – The U.S. greenback climbed to a two-year excessive versus its rivals on Monday and was on observe for its single greatest every day acquire in additional than six weeks as a wave of threat aversion swept via international markets, boosting the buck’s protected haven enchantment.

With struggle in Ukraine coming into a 3rd month and the lockdown of 25 million folks in Shanghai about to enter a second month, investor sentiment was fragile amid worries that climbs in shopper costs will result in speedy international rate of interest rises.

In opposition to a basket of its rivals, the greenback gained 0.6% in early London buying and selling to 101.62, a stage it final examined in March 2020 and on observe for its greatest every day rise since March 11.

“The week is beginning with a firmly unfavourable tone in international markets, that are discounting a mixture of a) many central banks accelerating their tightening plans, b) Russia and Ukraine shifting additional away from a diplomatic answer, c) China’s Covid disaster which is forcing a re-rating of progress expectations within the area,” ING strategists mentioned in a be aware.

The euro’s tiny beneficial properties after information of French President Emmanuel Macron’s comfy election victory over far-right rival Marine Le Pen shortly dissipated, with the only forex down 0.8% at $1.0729.

Commodity currencies have been singled out for particular punishment because the greenback soared, with the Australian greenback and the New Zealand greenback main losers.

The , which was one of many greatest gainers in currencies within the first quarter of 2022 due to surging commodity costs, fell broadly. It weakened greater than 1% towards the U.S. greenback and fell by an identical margin versus the Swiss franc.

Hawkish feedback by varied policymakers final week additionally raised the dangers of aggressive coverage tightening by international central banks. Cash markets anticipate the Fed to lift rates of interest by a half level on the subsequent two conferences and the European Central Financial institution to lift rates of interest by 25 bps in July.

fell to a one-year low, extending losses after posting its worst week since 2015, as buyers fret concerning the worsening financial progress outlook as a result of strict COVID-19 measures and lockdowns throughout the nation.

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