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Weekly Roundup: US dollar soars in risk-off trade

currency-newsWeekly Roundup: US dollar soars in risk-off trade
The US dollar skyrocketed last week, with the US currency surging to new multi-year highs.

This uptick in the ‘greenback’ was driven primarily by risk-off flows, which caused investors to flock to the safe-haven currency en masse.

Aiding the US dollar’s ascent was a stronger-than-expected ISM non-manufacturing PMI as well as the minutes from the Federal Reserve’s June policy meeting.

The FOMC minutes highlighted policymakers’ willingness to continue aggressively raising interest rates, even if it means pushing the US into a recession.

The end of the week then saw the US dollar relinquish some of its gains after a stronger-than-expected US payroll release helped to buoy market sentiment at the expense of USD exchange rates.

So far this week we have seen the ‘greenback’ trend broadly higher, the currency being underpinned by Fed rate hike bets as well as concerns over a rise of Covid cases in China.

This upside in the US dollar may be reinforced in the middle of the week with the publication of the US consumer price index as another uptick in US inflation is likely to further bolster Fed rate hike bets.

The end of the week will then see the release of the latest US retail sales figures. Will a rebound in sales growth reflect positively on USD exchange rates?
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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