With the U.S. in a difficult economic state for the past years despite being the world’s largest economy, an unexpected climb of its currency to a one-week high versus its key peers was quite a surprise. At present, the U.S. dollar advanced for a fifth day against the Yen despite the rise in the country’s cost of living. This is the longest streak for more than a month.
Meanwhile, in the U.K., the pound slid as policy makers foresaw greater risks in the nation from a euro-area slump during a recent Bank of England meeting. The central-bank’s pessimism about the global economy caused a drop in the pound to the disappointment of investor’s who places bets on the increase in interest rates. Two of the officials’ votes were placed in increasing rates by 25 basis points while the seven other votes opted to keep it at 0.5 percent. Furthermore, as investors constantly monitor prospects from the European Central Bank in terms of additional easing policies, the euro has fallen against 14-16 major peers. South Korea’s won experienced a climb as well.
According to New York-based BNP Paribas SA foreign exchange strategist Vassili Serebriakov, “The consumer-price-index numbers helped the dollar and are consistent with the recovery in risk sentiments.” She further adds, “It doesn’t change that much from the Federal Reserve’s perspective, but it helps ease the fears that global central banks are losing the fight against disinflation.”
At 5 p.m. in New York, the Bloomberg Dollar Spot Index rose to 0.3 percent to 1,067.40 versus 10 major counterparts, reaching 1,067.77. It is the strongest it has ever been in a week. In other currencies, the euro falls at 0.5 percent to $1.2649 which is its highest decline since October 134. The currency of the region weakened at 0.4 percent to 135.52 yen. The latter decreased 0.1 percent to 107.14 dollar, making a consecutive five-day drop since September 12.