The dollar index, a gauge of the greenback’s performance against six major currencies, gained about 0.1% on May 12, to 104.22 (points), reaching the highest level since December/December. 2002.
The greenback, seen as a “safe-haven”, received support amid a global stock market slide amid investor concerns that central banks are lagging in restraining the sharp rise in consumer prices, while the economic growth outlook is facing risks from China’s prolonged strict social blockade related to the COVID-19 pandemic.
The US consumer price index (CPI) rose 8.3% in April 2022, down from the 8.5% gain in March but well above economists’ estimate of 8.1%. According to the US Department of Labor, although the inflation rate in April was slightly lower than in March, mainly thanks to the cooling of gasoline prices, but since May 10, gasoline prices have continued to escalate. Prices of vegetables, food, services and transportation, especially by air, have all increased significantly; airfares increased by 18.6% in April compared to March, the increase can be said to be the fastest on record; Food and beverage prices at restaurants also increased by 0.9% – the most increase since October 2021.
The above data shows that inflation may have peaked, but it is unlikely to “cool down” quickly and derail the Fed’s monetary policy plans.
According to the CME FedWatch Tool, the market is anticipating a rate hike of at least 0.5 percentage points by the US Federal Reserve (Fed) at its next two meetings, scheduled for January 15. 6 and 27/7.
Rodrigo Catril, senior currency strategist at National Australia Bank, said: “Inflation remains higher than expected in the US, raising concerns about the Fed having to accelerate its monetary tightening path. bad”.
The May 2022 CPI data is due to be released five days before the Fed’s policy meeting in June, and Catril thinks a new inflation “shock” could push a rate hike to zero. 75 percentage points.
Also on May 12, the euro was flat at 1.05095 USD/euro, after gaining in the previous session as the European Central Bank (ECB) just reinforced expectations that they will raise interest rates in May. July 2022, the first time in more than a decade. The single euro has fallen sharply, to a more than five-year low of $1.04695 per euro at the end of last month.
The British pound, the Australian dollar (AUD) and the New Zealand dollar (NZD) also all fell in this session, when issues related to Brexit were “hot” again.
Meanwhile, the Japanese yen continued to receive support from long-term government bond yields falling from multi-year highs (above 3.2%) earlier this week. The Japanese currency gained about 0.2% on May 12 to 129.67 yen/USD, off a more than two-decade low of 131.35 yen/USD recorded on May 9. , as the yield on Japan’s 10-year bond fell to a two-week low of 2.862%.
Bitcoin fell about 8% this session, to $26,645/BTC, but remains above the previous session’s “low” of $27,757/BTC, its lowest since early last year. Meanwhile, the cryptocurrency Ether – Bitcoin’s rival – also fell nearly 14% on May 12, hitting a 10-month low of $1,785/ETH.
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