The greenback has moved aggressively in the market, soaring close to its highest level since 2002. The mitigating CPI rates from April gave this much-needed push. With favoring numbers from the reports, the Federal Reserve decides on aggressive policy changes to keep the momentum.
While the market seems to hold steady for the larger part, the U.S. dollar is leading the pack with phenomenal aggression. The currency holds steady against the odds reported through the months and is ready to set new records. According to the latest reports, the dollar index is off, surpassing the height it set during its run in 2002.
However, on Thursday, the greenback felt a little stumble that put it 0.1% behind the chart. The index is still just around 30 basis away from getting to the 104.19 it recorded a couple of decades ago. Expert traders on some of the best forex trading platforms in 2022 believe that the currency has all the possibilities of reaching the level within the week. You can also explore forex broker USA platforms.
Their conviction has to do with the numbers from CPI reports for April. The annual CPI reached 8.3% in April, more than the 8.1% predicted by experts. On the bright side, the number has become less threatening from the 8.5% in March.
Despite the historic increase in the inflation rate, the feds believe it is unlikely to affect the current monetary policies. The feds have the market fully priced to the policy rate up to 0.50% for the next two meetings scheduled for June 15 and June 27.
In the opinion of Rodrigo Catril, Senior Currency Strategist at the National Bank of Australia, the stronger inflation rates will further push the feds to tighten their policies. He further stated that there is also a strong possibility for an increase of 75 basis points as the May CPI index will arrive just five days before the June meeting.
On the other hand, the Euro also witnessed stability after a long-standing bearish sentiment in the last few months. The 0.14% increase helped the currency pull away from the five-year low of $1.04695. With the currency beginning to gain momentum, the European Central Bank confirmed its plans to hike policy interest rates in July, and the ECB has not increased rates in more than a decade now.
The Japanese yen is recovering from a two-decade low as the Treasury yield stooped from a multi-year peak. The British pound seems to lose its vigor as the headlines brought up the topic of Brexit again.
The positivity found in the forex market did not reach the cryptocurrency market. The crypto king lost significant ground and fought for $30,000 over the week. Failing to hold up, BTC currently trades for $26,675, losing around 8% in a single day.