US Dollar Index drops as euro rises after hawkish ECB remarks

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US Dollar Index drops as euro rises after hawkish ECB remarks

On Thursday, the US Dollar Index (DXY) measured against a basket of six major currencies teetered as much as 0.56 per cent to 93.33, as the bloc’s common currency, euro, shared among 19 eurozone member states, climbed sharply against its American counter following slightly hawkish remarks from ECB (European Central Bank) President Christine Lagarde, the former IMF head, alongside an weaker-than-anticipated downturn in US GDP (Gross Domestic Product) over third quarter of 2021.

Nevertheless, in the day’s sweeping downward spiral in US Dollar Index was almost entirely prompted by a disappointing US GDP growth over Q3, 2021, as an uptick in US Treasury Yields with 10-year Treasury bond notes wrapping up the day at 1.57 per cent had botched to restore the greenback’s safe-haven appeal.

Apart from that, a stronger spot gold prices, which usually is seen as a powerful hedge against higher inflation, hovered above $1,800 per ounce and continue to press the American currency. On top of that, ECB kept its benchmark borrowing cost unchanged at 0.0 per cent as anticipated with depository interest rate held at -0.50 per cent, while ECB’s Lagarde had stood by her plans not to taper fiscal stimulus at least until end-December, but made a slightly hawkish remark on rate-hikes, which eventually had clamped down the US Dollar further against its European peer.

US Dollar drowns as euro jumps 0.7 per cent

Citing statistics, in the day’s FX market round-off, euro soared 0.7 per cent to $1.1683 against the greenback, while British Pound gained 0.41 per cent to $1.3793. Aside from that, the safe-haven Japanese Yen added 0.28 per cent 113.48 yen per Dollar, while Swiss Franc, another safe-haven asset, jumped 0.69 per cent to $0.9118.

Besides, commodity-linked Canadian Dollar added 0.17 per cent to $1.2344, while other loonies such as Australian Dollar and New Zealand Dollar advanced 0.39 per cent and 0.43 per cent to $0.7548 and $0.7202 respectively against their American counterparts.