The euro increased to $1.0198 by a stunning 1.5%, its greatest level since August 17, and far higher than the 2-decade low of $0.9862 seen the week before.
Additionally, sources confirmed for Reuters that the ECB officials are increasingly concerned that they may need to increase their benchmark interest rate to 2% or higher in order to stop the euro zone’s unprecedented inflation.
The euro’s rise was particularly noticeable when compared to the GBP; today it reached a high of 87.22 pence. GBP increased 0.8% in value against the dollar on the day to $1.1678 and touched its highest mark in September in the London session, indicating a slight improvement from the 37-year low of the week that passed.
By .0.67%, the dollar index (DXY) fell to 108.25, from a 20-year high of 110.79 achieved on September 7.
Market participants are on edge as they wait for the release of the US CPI data, which, according to experts at Commonwealth Bank of Australia, could decide if the US Federal Reserve raises interest rates by 50 bps or 75 bps at its session in the week to come.
Prior to a period of secrecy preceding the central bank’s discussions, the Federal Reserve policymakers maintained their harsh language on Friday.
Governor of the Fed Christopher Waller endorsed a large rise at the upcoming meeting, and James Bullard of the St. Louis Fed maintained his proposal for a 75 bps increase.
In terms of the Japanese yen, the dollar was stable at 142.66 yen, just a touch below the peak of 144.99 reached the week before, which was not seen since 1998.
Japanese officials made hints about intervening to prevent the currency from sinking more. In an interview with a local television station, a senior government spokeswoman stated that the government must take the necessary action to stop unwarranted yen losses.
The Aussie which normally has a stellar performance when investors are optimistic about growth on the horizon was up at $0.6870, and Bitcoin (BTC), which behaves similarly, was up at $22,100 after previously reaching its highest level since the middle of last month.