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US dollar steadies as Fed Gov indicates no softening in rate hike

US dollar steadies as Fed Gov indicates no softening in rate hike

The US dollar reportedly steadied on Monday after Christopher Waller, governor of the Federal Reserve, said that the central bank will not be ‘softening’ its fight against inflation, leading to many investors thinking that the high sell-off last week was exaggerated.

Following the release of a cooler-than-expected inflation data last week, the dollar saw a fall of 4% for the first time in over two and half years.

The dollar index grew 0.234% to 106.960, after having dropped to a three-month low of 106.27 on Friday. 

Meanwhile, global equities surged as investors turned to risky assets hoping that rising inflation would lead to less aggressive rate hikes.

However, Waller said that inflation data was just one data point and that they would need other similar readings to be convinced of inflation slowing down. He also added that the Fed might start thinking of a slower rate hike pace.

A survey showed that consumer sentiment in the US dropped this month amid worries regarding inflation and high borrowing costs.

The US two-year yield in the US rose to 4.41% after touching 4.29% on Friday, while the ten-year yield rose to 3.899%.

Meanwhile, the British pound fell 0.74% last week, while the Japanese yen was down 0.60% and the euro by 0.47%.

Risk-sensitive Australian and New Zealand dollars also fell, losing out on the gains made following China moderating its zero-Covid policy.

It was reported on Sunday that regulators in China told financial regulators to provide more support to property developers to help the struggling real estate industry.

Chinese yuan soared against the US dollar to a nearly two-month high, as the central bank increased its official guidance fixing to the most it had since 2005 when it canceled the currency’s decade-old against the dollar.  

Elsewhere, cryptocurrencies are still facing pressure from the fall of the second largest crypto exchange FTX, with its native token down by 7.6% at $1.31, while Bitcoin slipped 2.2% coming below $16,000.

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Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.