The dollar weakens against the euro, yen and pound
During today’s trading, the dollar is depreciating against the euro, yen and pound sterling. The ICE-calculated index showing the dynamics of the US dollar against six currencies (the euro, the Swiss franc, the yen, the Canadian dollar, the pound sterling and the Swedish krona) is losing 0.72%, the broader WSJ Dollar Index -0.64%.
As of 9:10 Moscow time, the euro was worth $1.0065 compared to $0.9997 at the close of the previous session.
Traders reacted calmly to the statements of the Chairman of the Federal Reserve System (FRS) Jerome Powell, who confirmed that the US Central Bank is fully focused on reducing inflation. The weak reaction of the dollar to Powell’s words is due to the fact that traders have already included in its value another increase in the base rate by the Fed by 75 basis points (bp) at the September meeting, Trading Economics notes.
“Our opinion and my personal opinion is that we need to act directly and decisively, as we are doing, and we should continue to do so until our work is completed,” Powell said during a speech at an online event of the Cato Institute on Thursday.
More important to traders seemed to be the words of the head of the European Central Bank (ECB) Christine Lagarde, who said during a press conference following the meeting on Thursday that the regulator plans to raise interest rates at the next few meetings.
As reported, the ECB raised all three key rates on Thursday by 75 bp.
Trading Economics also notes that the weakening of the dollar on Friday may be due to the desire of traders to take profits after a significant increase in the value of the US currency in recent times.
The exchange rate of the American currency against the Japanese national currency amounted to 143.05 yen by 9:10 Moscow time compared to 144.11 yen the day before.
The pound at the same time was worth $1.1585 compared to $1.1504 at the close of the previous session. On Thursday it became known that Queen Elizabeth II of Great Britain died at the age of 96.