The Dollar Strengthened Against Multiple Currencies

On world markets, the dollar’s value against a basket of currencies also increased last week. The dollar recorded growth for the second week in a row, which is, among other things, a consequence of uncertainty in the financial markets, so investors divert their capital to safer investments.

The dollar index, which shows the movement of the American value against the other six most important world currencies, strengthened last week by 0.4 percent to 103.08 points.

At the same time, the dollar strengthened by 0.8 percent against the European currency, so the price of the euro slipped to $1.0805, reports Hina.

The dollar exchange rate against the Japanese currency rose 1.7 percent to 137.95 yen.

The dollar’s second week in a row is thanks to its status as a safe-haven currency in uncertain times.

Wall Street and the world’s other major stock markets are reeling from uncertainty over negotiations between Democrats and Republicans in the US to raise the government’s debt ceiling.

Congress must reach an agreement by June 1. The federal authorities will be able to finance the work of some state institutions.

Fed officials’ messages about a possible further increase in interest rates to suppress inflation contributed to strengthening the dollar.

A Decline in Prospects

Thanks to this, the dollar index reached its highest level in seven previous weeks by the middle of last week, and the money market estimated that there is a 40 percent chance that the Fed will raise key interest rates by 0.25 percentage points in June.

However, those odds fell to 19 percent on Friday, and the dollar lost some of its previous gains after Fed Chairman Jerome Powell’s comments.

Powell said that it is still being determined whether the Fed will have to continue raising interest rates and that it will depend on future economic trends and, above all, on inflation.