After a recent 0.67% drop, the euro was trading at $1.066, its lowest point since March 20.
Inflation in Europe is cooling faster than predicted, and China’s growth is stuttering. This caused the U.S. dollar to surge significantly on Wednesday, reaching a peak not seen in almost two months.
The result was a 0.51% increase in the dollar index to 104.6, the highest level since March 16.
This indicator compares the dollar’s value to that of six major rivals.
According to data released on Wednesday, inflation rates are falling rapidly in France and many large German states. According to analysts, these numbers make the euro less appealing than the dollar since they lower the pressure on the European Central Bank (ECB) to maintain rising interest rates.
As energy and food price rises slowed, inflation in France dropped to its lowest level in a year in May.
Analysts also noted that weak economic statistics from China contributed to the strength of the U.S. dollar. According to a poll issued on Wednesday, China’s manufacturing activity dropped faster than projected in May, the latest indication that their bounce back from COVID-19 lockdowns is lethargic.
The Australian and New Zealand dollars suffered as a result of the data.
The Australian dollar hit a new low of $0.648 today, its lowest since mid-November. Compared to the dollar, the value of the Chinese yuan has dropped to 7.129, a level not seen since November.
The value of the Japanese yen fluctuated all day versus the US dollar as currency markets were active.
The Japanese government’s chief currency ambassador stated on Tuesday that they would watch closely as the currency market responds, which caused the dollar to drop dramatically from its six-month high of 140.93.
It dropped more on Wednesday but has since recovered some of those losses and is now trading at 139.83 yen.
After President Tayyip Erdogan extended his two decades in power in elections on Sunday, the Turkish lira plummeted to a record low of 20.75 per dollar.