“The dollar rose to its highest level in two years on Jan. 14 as strong economic data prompted investors to reduce their bets on a Federal Reserve rate cut, while potential U.S. tariffs remain in focus.”, — write: epravda.com.ua
The dollar rose to its highest level in two years on Tuesday, as strong economic data prompted investors to reduce their bets on a Federal Reserve rate cut, while potential U.S. tariffs remain in focus. Reuters writes about it. The dollar index, which measures the U.S. currency against six other currencies, rose 0.20% to 109.58, not far from a 26-month high of 110.17 it hit on Monday. In October 2022, it reached 114.78, the highest since 2002. After Friday’s employment report reinforced support for the US central bank’s dovish stance, investors will be keeping a close eye on US inflation, with producer prices (PPI) due later on Tuesday and consumer prices (CPI) on Wednesday. Advertisement: Traders expect the Fed to ease monetary policy by 28 basis points this year, down from 50 basis points points that the Fed predicted in December. The 10-year U.S. Treasury yield hit a 14-month high of 4.805% on Monday before retreating. On Tuesday, they decreased by 3 basis points (bps) to 4.776%. As President-elect Donald Trump returns to the White House next week, the focus is on his policies, which analysts expect will add to growth and pressure prices.Advertisement: The threat of tariffs, along with a lower likelihood of a Fed rate cut, are priced in. raised the yield on Treasury bonds and supported the US dollar. The euro rose 0.12% to $1.0257. On Monday, it touched $1.0177, the lowest level since November 2022. Europe’s currency fell more than 6% in 2024 as investors worried about tariff threats and monetary policy divergence between the Fed and the European Central Bank.