Title: Dollar Down, Euro Steadies as Investors Await ECB Policy Decision

Mar 08, 2022 10:45PM ET

By: AnalysisWatch

The dollar was lower in Asia on Wednesday morning, while the euro paused to take a breather. Commodity currencies also dropped from recent peaks as investors expected sky-high energy, grain, and metal prices to cut demand in the long term.

The US dollar index, which traces the greenback against a basket of other currencies, was down 0.05% at 99.035 at 10:36 PM ET, just short of a 22-month high.

The USD/JPY pair rose 0.15% to 115.84, with Japanese GDP growing 1.1% quarter-on-quarter and 4.6% year-on-year in the fourth quarter of 2021.

The AUD/USD pair gained 0.15% to 0.7277 after Australia's Westpac consumer confidence fell 4.2% in March. The NZD/USD pair increased by 0.10% to 0.6811.

The USD/CNY pair fell 0.03% to 6.3168. Chinese data released earlier in the day showed that the February 2022 consumer price index rose 0.6% month-on-month and 0.9% year-on-year. The producer price index increased by 8.8% year on year.

The GBP/USD currency pair rose 0.08% to 1.3114.

The euro stabilized in early trade, recovering from Monday's 22-month low of $1.0806 to trade at $1.0898. News that the European Union is reportedly discussing a joint bond issue also boosted the single currency.

Although such an issue could be a harbinger of stimulus measures and an eventual fiscal union, not many details were given. Some investors also warned that the euro is unlikely to rise as long as the Russian invasion of Ukraine continues.

Investors are now looking ahead to the European Central Bank's latest monetary policy decision, due on Thursday. The possibility of stagflation means that bets are increasing on the central bank postponing interest rate hikes until the end of 2022.