By Yasin Ebrahim
Investing.com – Dollar rose on Thursday, shaking falling U.S. bond yields, with Wall Street betting that the dollar is unlikely to lose its rank as the world’s reserve currency, even though the Federal Reserve is eventually forced to lower its rates below zero.
The one that measures greenback against a trade-weighted basket of six major currencies increased by 0.21% to 100.46.
The dollar is unlikely to lose its dominant position as the world’s reserve currency if the Fed has used negative interest rates, as central banks rely on the dollar to secure current-account and financial-account transactions during times of crisis, Commerzbank (DE 🙂 said.
The talk of negative interest rates is continuing, even as Fed chairman Jerome Powell recently said that further cuts in the central bank’s benchmark rate to below zero are unlikely.
The federal futures market continues to price in negative U.S. interest rates early next year.
The latest uptick in the dollar even comes as it slid, as fears of a long-standing path to economic recovery were exacerbated by further signs of labor market pain.
USA. The Department of Labor reported Thursday that the original unemployment claims were $ 2,981 million for the week ending May 9, above the economists’ projections of $ 2.5 million.
Dollar movement higher was also supported by a fall in pounds and euros.
, which accounts for about half the value of the dollar index, fell 0.31% to $ 1,073, even when Germany, the EU’s economic powerhouse, reported better-than-expected inflation figures.
fell 0.30% to $ 1.2193 as cable sentiment remains negative after data showed earlier this week the U.K. the economy grew by a record 5.8% in March, as the impact of the Covid-19 pandemic was a blow to growth.
Ongoing concerns about the U.K.-EU trade talks have also weighed on cable as investors worry whether the U.K. will agree to extend negotiations beyond the transitional period with the June 30 deadline soon approaching.
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