The dollar index exceeded the 112 level again after 20 years, with the expectation that the central banks of developed countries will continue to increase their aggressive interest rates in the face of increasing inflationary pressures.
While the expectations that the central banks of developed countries will continue to increase their aggressive interest rates in the face of increasing inflationary pressures, the recession concerns deepen, and this situation causes the global demand for dollars to strengthen.
With these developments, the dollar index, which reached its highest level since May 2002 with 112,071 today, hovers at 112,0500 with an increase of 0.7% compared to the previous close as of 12:00.
The dollar index rose more than 2% on a weekly basis.
With the increasing global dollar demand, the euro/dollar parity is trading at 0.9751, the lowest level in 20 years, and the sterling/dollar parity at 1.1150, the lowest level in 37 years.
Although the dollar/Japanese yen parity declined to 140 levels yesterday after the intervention of the Japanese government and the Bank of Japan (BoJ) in the foreign exchange market, it could not hold at these levels and started to rise again. The pair was stabilized at 142.8 today, up 0.3% compared to yesterday’s close.
Powell’s speech will be watched
Analysts stated that the US Federal Reserve (Fed) increased the policy rate by 75 basis points on Wednesday, as well as the forecasts that it could raise interest rates by 125 basis points by the end of this year, supporting the dollar.
Emphasizing that the leading macroeconomic data announced in Europe increased the recession concerns regarding the region, analysts reported that the Russia-Ukraine war and the parallel energy crisis also suppressed the euro and sterling.
Analysts stated that today, Fed Chairman Jerome Powell will make the opening speech and the “Fed Listens” event, which will be held with the theme of transition to the post-pandemic economy, will be watched. They also stated that the leading manufacturing industry and service sector Purchasing Managers Index (PMI) to be announced in the USA came to the fore on the data agenda.
On the other hand, according to the data released today, the manufacturing industry PMI in Germany, Eurozone and England remained below 50, indicating that the contraction in the economy continues.
Source: Trthaber / Translated by Irem Yildiz