The dollar is climbing 16-month highs against the euro and other currencies, while the yen is slipping to multi-year lows in the wake of data released yesterday in the US and showed a jump in inflation to the highest level since 1990, rekindling expectations for a faster rate hike by the US Federal Reserve.
The euro is falling to $ 1.1459 today, the lowest level since July 2020, as the European Central Bank is expected to follow the US Fed in tightening monetary policy, but with a significant delay.
The British pound is down slightly at a new 11-month low of $ 1.3388, while the yen is hovering at $ 114.15 – close to a four-year low of 114.69 last month.
“If investors push the EUR-USD to the next level of support near $ 1.1425 and $ 1.1380 it will be a big test for the market today,” UniCredit analysts told Reuters. “However, this test will likely depend on the future rise in US bond yields and the consequent widening of spreads between US and German bonds,” he added.
The rising dollar has also hit emerging market currencies, with the MSCI index experiencing the biggest losses in two months.
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