The greenback is supported by analysts’ assessments that the easing of price pressure in the USA will not necessarily lead to a more relaxed monetary policy by the US Federal Reserve.
The dollar ended the week above recent weakness, gaining against other major currencies. The euro fell accordingly. On Friday afternoon, the European common currency was 0.6 percent lower at $ 1.0255. Analysts had pointed out that the declining rate of inflation in the USA does not necessarily have to lead to a slower pace on the part of the Fed. “Although the price pressure has eased a little, energy and commodity prices are still far too high and the US Federal Reserve could continue its tight interest rate policy for a while longer,” said Christian Henke from broker IG. The US currency had recently lost value in the face of speculation that interest rates would rise less sharply. The euro was also burdened by the fact that analysts at Commerzbank corrected their forecast for the European currency downwards. The experts assess the possibility of the euro zone slipping into recession as probable. The reasons they gave included the gas shortage in large parts of Europe and the persistently high gas prices.
On the oil market, prices eased again after the previous day’s rally. US oil WTI cost 2.5 percent less at $92 a barrel. The European Brent variety fell 1.6 percent to $98. On Thursday, the increased forecast by the International Energy Agency (IEA) for oil demand this year drove prices up sharply. However, uncertainty was caused by the fact that OPEC is assuming lower oil demand due to the economic uncertainties and has reduced its forecast for the third time since April. There is currently a lot of uncertainty in the market regarding demand, said Westpac’s Justin Smirk. And as long as this continues, the market will remain volatile.