US Dollar Hit 6-week High against Major Currencies

The price of the US dollar continued its strong rise during trading today, Wednesday, to its highest level in 6 weeks, despite the negative retail sales data yesterday and the second failure in less than 7 days of the debt ceiling discussions between the administration of US President Joe Biden and the House led by the opposition party.

US Dollar 1.00 USD inv. 1.00 USD

Euro                         0.92                 1.08

British Pound         0.80                 1.24

Indian Rupee          82.41               0.012

Australian Dollar    1.50                 0.664

Canadian Dollar     1.34                  0.74

Singapore Dollar    1.34                  0.74

Swiss Franc              0.89                 1.11

Malaysian Ringgit    4.52                0.22

Japanese Yen          137.57            0.0072

Chinese Yuan          7.009              0.142

The US dollar witnessed a strong recovery during the day’s trading, supported by the statements of some hard-line US Federal Reserve members, led by member Loretta Mester as well as Raphael Bostic and Thomas Parkin, after the retail sales data issued yesterday, which despite its negativity, showed growth, albeit less than expected, which is what It may be reflected in a slight slowdown in inflation and growth.

Bostic said yesterday evening that he believes that the US Federal Reserve is still far from reaching the inflation target, and added that the worst scenario that the US Federal Reserve may face at the present time is the acceleration of unemployment growth and the resistance of inflation rates to decline, and stressed the necessity of the bank's commitment to controlling inflation as a maximum priority. 

Thomas Barkin, a member of the US Federal Reserve in the state of Richmond, stated that if high inflation continues, or accelerates in the worst case, there will be no obstacle whatsoever to prevent the Fed from raising interest rates further.

In the same hawkish tone, Cleveland Fed member Loretta Mester stated that she does not believe that the FOMC has reached the level of tightening enough to restrict demand and economic activity at the current rate.

Those hard-line statements, which followed the issuance of the retail data, led to an increase in investors' appetite for the dollar today, although its gains remained limited in light of investors' anticipation of the results of the debt ceiling issue discussions between the Biden administration and the House of Representatives led by Republican Kevin McCarthy.