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Stoxx 600 returns to January 2021. Oil rises and interest rates worsen – Markets in a minute

Central banks encourage exchange. Yen rises, Swiss franc drops

The foreign exchange market is particularly agitated during this Thursday’s session, marked by central banks’ monetary policy decisions.

The euro slides against the dollar, which was reinforced by the decision of the US Federal Reserve (Fed) to raise interest rates by 75 basis points. The single currency drops 0.19% to $0.9818.

This Thursday, the Fed raised the interest rate by 75 basis points for the third consecutive time, giving strength to the dollar, which is already in high demand as a safe-haven asset due to the uncertainty surrounding the war in Ukraine. Bloomberg’s dollar index – which compares the strength of the green note to 10 rival currencies – rose 0.29% to $111.29.

Still in Europe, the Swiss franc reacts to the meeting of the central bank that this Thursday raised the reference interest rate to 0.5%, having been the last country in the Old Continent to raise key interest rates above zero. The Zurich currency dropped 1.44% to 1.0185 dollars and 1.29% to 1.0376 euros.

Although this was the most aggressive increase in the reference rate in 20 years, it disappointed the market, according to analysts, as investors pointed to a rise of 100 basis points. “The decision [do Banco Nacional da Suiça] led to an increase in ‘short-selling’ on the euro and franc and pound franc pairs, as a larger increase was expected”, explained Vasileios Gkionakis, exchange strategist at Citigroup, in a note sent to clients, quoted by Bloomberg .

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Non United Kingdom, to pound soma 0.20% for 1.1474 euros and trades on the waterline against the dollar (0.06%), after the Bank of England raised interest rates by 50 basis points.

In the bloc, the zloty is also worthy of note, which is trading close to one-month lows, devaluing 0.3% to 4,789 euros. The currency is still under pressure from Vladimir Putin’s speech, which this week announced a partial military mobilization for the war in Ukraine.

Outside the Old Continent, the yen added 1.53% to USD 0.0070 and grew 1.69% to EUR 0.0072, after the Bank of Japan decided to intervene in the foreign exchange market, for the first time since 1998, after the yen skidded following the announcement that the country’s interest rates would remain low.

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