A decrease of 0.50% in the annual rate of inflation was reported for October, reducing the expected number of 8.20% to 7.70%. Consumer Price Index figures, has provided salvation to the euro versus the U.S. A recent bounce to the upside, owing to better-than-expected U.S. The projected rates of inflation have presented mixed euro-to-dollar forecasts. Geopolitical uncertainty caused by the war in Ukraine, soaring energy prices and post-pandemic labor shortages have combined to form the “perfect storm” facing the dollar this year. ![]() As the dollar is a counter-cyclical currency, it historically performs well in unfavorable economic conditions. A hawkish Fed has increased rates six times in 2022, from 0.25% in March to 4% in November, making the dollar a destination for safety and speculative exposure to future increases.Īdditional factors have contributed to dollar strength, causing it to flourish as a haven for investors seeking reduced risk. This has led to successive Fed rate hikes, increasing dollar attractiveness for investors while encouraging savers. Surging global inflation, at a 40-year high in the U.S., is a key driver behind the dollar’s strength. ![]()
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