A series of announcements by the world’s major central banks that they, too, will begin tightening their monetary policies partly hammered the feet of the US dollar. But he began to quickly return to his lost positions at the end of last trading week.
The US dollar strengthened by an average of 0.7 percent against major currencies on Friday. Practically so, he wiped away the losses he recorded a day earlier in response to the reported tightening of monetary policy bolts by other major world central banks.
The dollar firmed the most against the New Zealand and Canadian dollars, up one per cent. The dollar was followed by the Australian and the euro, compared with which the US dollar firmed 0.8 percent. Against the Japanese yen, the US dollar effectively stagnated. Since earlier this year, the dollar has then been stronger by nearly 7.5 percent against a basket of major world currencies.
Investors are responding to the expected, and now clearly announced, tightening of the Fed’s monetary policy, which will mean a higher return on assets denominated in the US dollar. However, the spread of the coronavirus omicron variant is also playing into the cards, under which investors shift their free funds into less risky currencies, which include the US dollar.
