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The dollar is wild and crosses the 114… Crushes currencies and drops gold to a 33-month low By Investing.com

© Reuters

Investing.com – Fresh comments from an Atlanta president have sent a storm in the markets about the Federal Reserve’s continued hike in interest rates to rein in inflation.

During that time, he sped towards 114 points to break the 20-year top.

While the yellow metal fell to its lowest level in more than 33 months, as it fell to the bottom of February 2020 and fell from the levels of 1630 points.

dollar now

The US dollar index rose during the writing of the report by more than 0.6%, as it was trading near the levels of 114 points, after it succeeded in surpassing them earlier in Monday’s trading.

And the main dollar index launched against a basket of currencies earlier to levels of 114.53 points, while it recorded its lowest level today at 112.94 points.

gold now

It fell during these moments of today’s trading to its lowest level since February 26, 2020, and an ounce at that time recorded levels of $ 1625.79.

While the yellow metal fell earlier in today’s trading in the US dollar to the levels of $ 1626.99 an ounce.

However, the safe haven pared some of its losses, and is now trading near $1640 an ounce, down around $3, down 0.2% during these moments of Monday’s trading.

On the other hand, futures contracts for the yellow metal are falling at levels below $1650 an ounce, down $6, or 0.4%, while they fell earlier to levels below $1,634 an ounce.

fall and sterling

In conjunction with the rise in the dollar index, the euro fell to the bottom of more than 20 years and the lowest ever, as it is trading at levels of 0.964 euros to the dollar, below the parity price, down by 0.46%.

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While it fell to its lowest level in more than 38 years, down to 1.0648 levels, down by 1.8% during these moments of today’s trading.

It fell during these moments of trading on Monday by more than 0.6%, reaching levels of $0.649.

The yen goes against the trend

On the other hand, it rose despite fixing interest near zero, but the Bank of Japan announced its intervention in the exchange market, as it stated that it would conduct daily purchases of 10-year bonds with a return of 0.25%.

The yen is rising during these moments around 0.5% at levels of 144 yen to the dollar, but so far this year, the yen has lost about a fifth of its value against the dollar.

On the currency’s most volatile day since 2016, it reached a low of 145.89 yen at the end of last week after the Bank of Japan indicated that it would not change its future guidance on interest rates.

Bonds explode

In tandem with the dollar’s gains, the yield on the 10-year note has exploded to 11 highs and above 2011 levels to reach 3.8%.

On the other hand, the yield on the two-year treasury bonds still indicates an inversion of the yield curve, as it exceeds the 10-year bond yield, and the yield on the two-year bond is trading near the top of the 15-year high, where it records today at 4.4%.

Fed statements

The statements of Rafael Bostik, President of the Federal Reserve Bank of Atlanta, concluded that the Fed believes that the US economy will not fall into recession even if the pain increases and some lose their jobs.

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Bostick believes that the Fed will succeed in lowering interest rates and that the markets will absorb the higher interest until the goal is achieved.

The Federal Reserve raised the US interest rate by 75 basis points, in a move that came in line with most expectations, and the Federal Reserve decided in its monetary policy statement unanimously to raise the interest rate to a range of 3% and 3.25%, compared to its previous level of 2.25% and 2.50%. .

This is the third time in a row that the US interest rate has increased by 75 basis points, as the last June and July meetings witnessed the rate increase at the same pace.

The Federal Reserve’s Open Market Committee said it is committed to bringing inflation back toward the 2% target, after inflation reached 8.3% last August on an annual basis.

The Fed added that inflation remains high, reflecting the imbalance between supply and demand due to factors including the “Corona” pandemic, high food and energy prices, and broader price pressures.

Fed officials raised their interest rate expectations at 4.4% by the end of this year, compared to 3.4% in previous estimates, and its rise to 4.6% next year, but the Fed expects the US interest rate to decline to 3.9% in 2024, which is higher than previous estimates of reaching 3.4 % in that year.

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