By Joice Alves
LONDON, Aug 19 (Reuters) – The U.S.dollar index surged on Friday and 카지노사이트 was on track for its biggest weekly gain since April 2020 on safe-haven demand, as investors worried about a further economic slowdown after Federal Reserve officials reiterated the need for higher rates.
The dollar index rose 0.5% to 108.01, its highest since July 15.The gauge is on track for a 2.2% rally this week, which would be its best weekly performance in more than two years.
Sterling tumbled 1% to $1.1839 on the day and was set for its biggest weekly decline against the dollar since September 2020, 우리카지노 as worries around Britain’s economic slowdown intensified.
The euro, down 0.4% to $1.0053, was on course to decline 2% since last Friday, which would be its worst week since July 8.
“The U.S. dollar is again on the front foot this morning supported by another round of hawkish Fed speak … the overall tone of Fed officials suggests that the Fed still has a lot of work to do to contain inflation,” said Jane Foley, head of FX strategy at Rabobank in London.
St.Louis Fed President James Bullard, San Francisco Fed colleague Mary Daly and Kansas City Fed President Esther George all said continuing to hike rates in a bid to fight inflation would be reasonable.
Weakening Chinese data this week and an energy crisis in Europe are raising fears of further economic slowdown, which have also hit European currencies and supported safe-haven flows, Foley added.”We expect another break below parity,” she said.
British consumer sentiment in August fell to its lowest since at least 1974, a survey showed, as households feel “a sense of exasperation” about soaring costs as inflation hit double digits.
Official data also showed Britain borrowed more than expected in July, underscoring the challenge facing the country’s next prime minister over how to provide more support to consumers.
Money markets now expect the Bank of England to raise interest rates to almost 4% by March.
European Central Bank board member Isabel Schnabel fueled inflation worries by saying consumer prices could still accelerate in the short term.
Yet despite the Fed chorus on the need for higher rates, the odds of another supersized 75 basis point hike next month have receded to 45% in money markets.
Fed Chair Jerome Powell will update the market on his views at the annual Jackson Hole symposium on Aug.25-27.
Against Asian currencies, the greenback was up 0.8% to 137.02 yen, after touching its highest since July 27. China’s yuan slipped to its lowest since September 2020 at 6.8168 per dollar in onshore trading after the central bank set a much-weakened midpoint guidance, with traders expecting further downside due to an economic slowdown.
In cryptocurrencies, bitcoin fell 8.7% to $21,437.Ether was down 7.75% to $1,700.
“Weakness has seeped into the crypto sphere as speculators retreated from highly risky assets amid expectation that higher interest rates were set to linger for much longer,” said Susannah Streeter, 카지노사이트 senior investment and markets analyst at Hargreaves Lansdown.
(Reporting by Joice Alves; Additional reporting by Bansari Mayur Kamdar; Editing by Shri Navaratnam and David Holmes)