In recent days the exchange rate of the US dollar (USD) has reached a roughly two-year high against the single European currency, the euro (EUR) and an 18-month high against the British pound (GBP). According to economic correspondents, the strengthening USD exchange rate is due to current concerns regarding the recurring pandemic situation of Covid-19 in China and especially due to the Federal Reserve system (Fed) raising interest rates.
On 26 April 2022, at 7:38 am CET, the exchange rate of the global currency pair of the EUR and the USD fluctuated at a mutual exchange rate of US$ 1.073 per EUR, with the current daily exchange rate correction, when the EUR currency strengthened by +0.18% against the USD. However, according to analysts, this small strengthening of the EUR is due to the profit withdrawals that investors made in USD in the previous period. At the same time, the USD also strengthened against the GBP, with the GBP/USD currency pair trading at GBP 1.276 per USD with the current daily strengthening of GBP by +0.14% against the USD. The current strengthening of GBP is also caused the profit withdrawals achieved through forex operations.
On Tuesday, 26 April 2022, at 7:47 am CET, according to the US Dollar Currency Index (DXY) we saw the USD at a price level of 101.57 with the daily decrease of -0.18%. However, the growth of the USD exchange value – practically since the beginning of this year 2022 – last week exceeded a level of 100 and at the beginning of the 17th week of 2022 it climbed to a two-year maximum against the EUR. The commodity market reacted to this increase in the USD with falling prices, as it is affected by the exchange value of the USD as the world’s major commodity currency for investors from outside the dollar zone. In particular, this price decline has traditionally been seen in oil and gold commodities, with the current price of investment gold on the commodity market moving from almost US$ 2,000 per troy ounce to almost US$ 100 per troy ounce lower.
During the European Tuesday morning of 26 April, at 7:58 am CET, investment gold traded on the Commodities Exchange Center (COMEX) commodity market at US$ 1,907.00 per troy ounce, with a daily gain of +0.58%. According to analysts, the current monetary policy of the Fed, and a possible further rate increase, has the most significant impact on the growth of the USD exchange rate. According to the hawks of the banking sector, at its forthcoming meeting of the Federal Free Market Committee (FOMC FED), which will traditionally take place as a two day meeting next week on 3 and 4 of May, the FOMC will fully address rate increases. These experts also forecast a growth of 50 basis points with interest rates in the US ranging from 0.75 to 1.00%, which was indirectly confirmed by Fed Chairman Jerome Powell in his speech, when he said that this variant of a jump rate is not excluded and will be the subject of negotiations by the FOMC.