top of page

Title: Dollar Up, Improving Risk Sentiment Boosts Euro and Pound

  • Writer: analysiswatch
    analysiswatch
  • May 18, 2022
  • 2 min read

May 18, 2022 01:29AM ET


By: AnalysisWatch


The dollar strengthened in Asia on Wednesday morning. Overnight gains in early trading supported the euro and sterling. This was helped by strong UK labour market data and a general improvement in investor sentiment thanks to positive US retail sales data and hopes that China will ease COVID-19 restrictions.


The U.S. dollar index, which tracks the greenback against a basket of other currencies, rose 0.07% to 103.25 points by 1:22 a.m. EDT.


The USD/JPY currency pair fell 0.15% to 129.19.


The AUD/USD pair fell 0.07% to 0.7024, while the NZD/USD pair rose 0.06% to 0.6365.


The USD/CNY pair rose 0.16% to 6.7488, while the GBP/USD pair fell 0.03% to 1.2486.


The single currency was trading at $1.0563 in early Asian trade after rising 1.1% overnight, its biggest percentage gain since March. The pound edged up 1.4% to $1.2501 after rising 1.4% overnight, posting its best day since late 2020 after the U.K. unemployment rate fell to a 48-year low.


The gains sent the dollar index to its lowest level in almost two weeks.


Improved risk sentiment was reflected in a jump in equity prices overnight, with US Treasury yields trending higher and recently hitting 2.9878%. Higher US yields also ended the yen's recent small rally as the Japanese currency is sensitive to higher US interest rates.


Federal Reserve Chairman Jerome Powell told the Wall Street Journal at an event on Tuesday that the Fed will tighten monetary policy until there are clear signs of slowing inflation.


Meanwhile, the riskier Australian dollar was generally in an uptrend, helped by improving risk sentiment, and gained 0.8% on Tuesday. It was also supported by the minutes of the Reserve Bank of Australia's latest meeting released on Tuesday, which indicated that the central bank will raise interest rates again at its June 2022 meeting.

Comments


2b94f773-a237-4da7-a599-6b42314ed9e6.png

Risk Disclosure: AnalysisWatch will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors. Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.
AnalysisWatch would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore AnalysisWatch doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.

bottom of page