(New York) The US dollar continued to gain strength against major currencies on Friday, benefiting from risk aversion after tough central bank stances raised fears of a slowing economy.
Around 4:30 p.m. (Eastern time), the dollar gained 0.38% against the euro at 1.0588 dollars for one euro.
The pound lost 0.21% to 1.2153 dollar, and 0.16% to 87.12 pence for one euro while the British currency suffered from the less aggressive tone of the Bank of England compared to its counterparts in Europe and in the USA.
“There is a general concern about the impact that interest rate hikes may have on growth in the world, or even if they will cause a recession,” indicated Kathy Lien of BK Asset management.
In addition to a half-point increase in the key rates of the three main central banks, the President of the ECB Christine Lagarde multiplied the formulas to send a message of firmness, showing the central bank’s determination to continue its rate hikes. substantial to combat inflation.
Mme Lagarde “killed all hope that the ECB would take into account the slowing economy, and the recession, when raising rates,” asserts Ipek Ozkardeskaya of Swissquote.
“It is to be expected that we will increase interest rates at a pace of 0.50 basis points for some time,” Ms.me Lagarde Thursday.
“No central banker has ever given such a ‘broad direction’ before,” continues the analyst.
As for the American central bank (Fed), it has clearly hinted that “the terminal level of key rates will be higher than what the market expected”, estimated Kathy Lien.
But according to her, “even if the American economy is heading for a slowdown, Jerome Powell, the chairman of the Fed has highlighted the robustness of the labor market”.
“Investors therefore think that if there is a US recession, it will be weaker than that of the rest of the world” which invites operators “to take shelter” by betting on the greenback, a safe haven.