Dollar rises on risk aversion; euro revisits parity

NEW YORK, Aug 22 (Reuters) – The U.S. greenback rose throughout the board on Monday, driving the euro again under parity, as buyers shied away from riskier property amid rising fears that interest-rate hikes in america and Europe, geared toward curbing inflation, would weaken the worldwide economic system.

In opposition to a basket of currencies, the greenback rose 0.8% to a greater than five-week excessive of 109.02 , not removed from the two-decade peak of 109.29 touched in mid-July.

The buck has discovered help in current periods as a number of Federal Reserve officers reiterated an aggressive financial tightening stance forward of the Fed’s Jackson Gap, Wyoming, symposium this week.

The most recent of those officers, Richmond Fed President Thomas Barkin, on Friday mentioned the “urge” amongst central bankers was towards sooner, front-loaded fee will increase. learn extra

“It is danger being taken off the desk after the market obtained a actuality verify from final week’s Fed audio system that an imminent dovish pivot is off the playing cards,” mentioned Michael Brown, head of market intelligence at Caxton in London.

“With buyers now clearly anticipating a comparatively hawkish message from Fed Chair (Jerome) Powell at Jackson Gap on Friday, it is an ideal cocktail of risk-aversion and a hawkish Fed for the buck to sure larger, particularly when progress worries, particularly in Europe, proceed to mount,” Brown mentioned.

The euro fell following Russia’s announcement late on Friday of a three-day halt to European gasoline provides through the Nord Stream 1 pipeline on the finish of this month. Traders fear that the halt might exacerbate an power disaster that has weighed on the frequent foreign money in current months. learn extra

The European Central Financial institution should hold elevating charges even when a recession in Germany is more and more seemingly, as inflation will keep uncomfortably excessive via 2023, Bundesbank President Joachim Nagel instructed a German newspaper.

The weak point briefly drove the euro under $1 for the primary time since July 14. The euro was final down 1.1% at $0.99345 .

Brown mentioned, “0.9950 appears to be the pivotal degree, as that is the prior low. If that offers approach, then we might see important additional losses, particularly with the ECB’s window to tighten coverage quickly slamming shut.”

China’s yuan dropped to its lowest in almost two years after the nation’s central financial institution lower its benchmark lending fee and lowered the mortgage reference by a much bigger margin on Monday, including to final week’s easing measures, as Beijing boosts efforts to revive an economic system hobbled by a property disaster and a resurgence of COVID-19 instances. learn extra

In opposition to the offshore yuan , the greenback was 0.54% larger at 6.869.

Sterling fell to its lowest since mid-July towards the greenback on Monday as surging power prices and a summer season of strikes highlighted the UK value of residing disaster and intensified fears of additional financial slowdown. learn extra

The pound was final down 0.64% at $1.17565 , inside a whisker of taking out the close to 2-1/2-year low of 1.17435 touched in mid-July.

In cryptocurrencies, bitcoin was about 2.52% decrease at $20,972, weighed down by broad danger aversion in markets.

Reporting by Saqib Iqbal Ahmed; enhancing by Jonathan Oatis and Cynthia Osterman

: .