The U.S. dollar index, which hit a two-decade high of 105.01 on May 13, yesterday broke its support at 102.24 and hit a near-month low.
The US Dollar appears to be losing its bullish momentum following a small rally in US bonds that has dragged yields lower in recent sessions. The US dollar index, which rose about 16% to its highest level in two decades in the 12 months to mid-May, lost about 2% in one week. above its support at 102.24.
ECB President Christine Lagarde said the bank is likely to move the eurozone deposit rate out of negative territory by the end of September and could raise it further if it sees the inflation stabilize at 2%. The euro's recovery comes as the dollar fell significantly after already falling last week. Investors had more appetite for riskier assets on Monday in reaction to Ms Lagarde's comments and easing concerns about an impending recession in Europe, as the US outlook looked less ominous. The euro gained big, rising 1.13% to $1.0697, after rising 3.4% from its multi-year low of $1.0349 on May 13.
Christine Lagarde also shared her belief cryptocurrencies aren’t worth anything as she believes they are based on no underlying asset to act as an anchor of safety. She also called on global policymakers to act and enact regulations in place regarding cryptocurrencies to protect inexperienced investors after the crash that happened at the beginning of the month, and notably the $65 billion crash of Luna.
Yesterday also saw the intervention of Kristalina Gerogieva, President of the International Monetary Fund, at the World Economic Forum in Davos. She insisted on the impact of the war in Ukraine on the rising price of commodities worldwide, especially food prices as wheat exports have been stopped by India after severe droughts, and Ukraine and Russia being two of the biggest exporters of wheat worldwide.
Cable stayed stable yesterday, but with PMI figures coming in today for both countries, this is bound to change. GBPUSD opened yesterday at 1.2575 and closed slightly under 1.2577.
GBPEUR saw Euro make big gains ahead of Lagarde’s speech and after her speech. The pair opened at 1.1838 and closed at 1.1770
EURUSD followed a similar trend with the pair opening at 1.0656 and closing at 1.0689, but already climbing up to 1.07309 this morning.
