Dollar ends mixed as investors post profits: September 09, 2022

The greenback ended the day mixed against its peers on Thursday as investors took profits on the recent uptrend in the USD. Elsewhere, the euro fell in hectic post-ECB trading after the central bank raised its rate by 75 basis points as expected.

Reuters reported on Thursday that Federal Reserve Chairman Jerome Powell said he did not see a conflict between the central bank’s two congressional-mandated goals of fostering both maximum employment and job stability. prices, and that he saw no justification for moving to a single inflation-only mandate. . “Particularly at this time, I don’t see the two goals as being in conflict at all because without price stability we won’t be able to achieve the kind of strong labor market we want for an extended period that benefits all, so I don’t see a reason to move to a single term,” Powell said in response to a question at an event hosted by the Cato Institute. Powell added that he believed both goals could be achieved in the “medium term”.

Against the Japanese Yen, the Dollar encountered further selling at 144.55 at the Asian open and retreated to 143.47 at the European open before dropping to an intraday low at 143.33 ahead of the New York opening. The pair then pared its losses and rebounded strongly to 144.44 in New York morning before breaking apart.

The single currency rebounded to 1.0014 at the European open before retreating to 0.9977 in early European morning. The pair then hit an intraday high at 1.0030 ahead of the ECB decision before falling to a session low of 0.9932 in the choppy post-ECB trading as ECB President Lagarde brushed a worried picture of the region’s growth prospects. However, the price then staged a strong rally to 0.9999 near the close of the broad USD pullback.

According to Reuters sources, the European Central Bank raised interest rates by an unprecedented 75 basis points on Thursday to rein in runaway inflation, even as a recession is now increasingly likely as the bloc lost access to vital Russian natural gas.

The ECB raised its deposit rate from zero to 0.75% and raised the main refinancing rate to 1.25%, its highest level since 2011, as inflation becomes widespread and risks taking root. “During the next meetings, the Governing Council plans to raise interest rates further to dampen demand and guard against the risk of a persistent rise in inflation expectations,” the ECB said in a statement. Medium-term inflation in the euro zone could turn out to be higher than expected, President Christine Lagarde said on Thursday. Lagarde cited as factors in such a scenario a deterioration in the productive capacity of the euro zone, further increases in energy and food prices, a rise in inflation expectations above the target from the ECB or higher-than-expected wage increases. “However, if energy costs were to fall or demand weaken in the medium term, that would reduce price pressures,” Lagarde said at the bank’s press conference after the policy meeting.

The pound remained under pressure in Asia and fell to 1.1476 in the European morning. Although it hit session highs at 1.1562 following the UK energy bill news, the price erased its gains and fell in tandem with the Euro to hit an intraday low at 1.1461 in New York morning before initiating a rebound to 1.1516 on USD weakness.

In other news from Reuters, Britain’s Treasury and the Bank of England will launch a 40 billion pound ($46 billion) program to ensure energy companies aren’t hit by a liquidity crunch in markets. volatile, new Prime Minister Liz Truss said Thursday. “Today I am announcing that together with the Bank of England, we will put in place a new program worth up to £40 billion to ensure companies operating in wholesale energy markets have liquidity they need to manage price volatility,” Truss said. said. “This will stabilize the markets and reduce the likelihood that energy retailers will need our support as they did last winter,” she told parliament.

The data will be released on Friday:

Retail sales in New Zealand, PPI in China, CPI, industrial production in France, consumer inflation in the United Kingdom, capacity utilization in Canada, change in employment, unemployment rate, wholesale inventories in the United States and wholesales.