The US dollar is trading flat at the beginning of Thursday’s session, with the index that measures its performance versus other major currencies remaining close to the two-decade maximum reached earlier in the month. The global mood reflects growing apprehension and determination to control inflation, with several major central banks giving account of their resolution to tighten monetary policy, despite the negative impact such measures may have on economic growth. Federal Reserve chairman, Jerome Powell, made it clear when he spoke on Wednesday defending the need to hike interest rates, that the looming economic slowdown is a price worth paying in order to halt the rise in consumer prices.
Against this backdrop, with the Fed leading the pack, there may be further upside for the US dollar, especially as recession fears will also support it, due to the greenback’s haven appeal.
Ricardo Evangelista – Senior Analyst, ActivTrades
Disclaimer: opinions are personal to the authors and do not reflect the opinions of LeapRate. This is not a trading advice.