NEW YORK — The dollar retraced from a
20-year high and the euro broke back above parity, following a
brief dip below, after data on Wednesday showed U.S. consumer
price inflation surged to a more than 40-year high in June.
U.S. annual consumer prices jumped 9.1% in June, the largest
increase in more than four decades, leaving Americans to dig
deeper to pay for gasoline, food, healthcare and rent.
“This morning’s number is staggeringly high. It’s higher
than expected and shows that inflation is going quickly in the
wrong direction,” said Chris Zaccarelli, chief investment
officer at Independent Advisor Alliance.
The euro plunged to $0.9998 against the greenback after the
data, breaking below the $1 level for the first time since
December 2002, before bouncing back to last trade at $1.0061.
The single currency is viewed as having support at the $1
The dollar index reached 108.59, the highest since October
2002, before falling back to 107.95.
The euro is being hurt as the region faces an energy crisis
sparked by sanctions imposed on Russia due to its invasion of
“The sanctions that are trying to hurt Russia are also
hurting the European Union,” said Lou Brien, a market strategist
at DRW Trading in Chicago. “They are in a tough time to begin
with coming out of the pandemic, but this additional layer of
trouble also makes the euro less attractive.”
Concerns about Europe’s outlook have increased since the
biggest single pipeline carrying Russian gas to Germany, Nord
Stream 1, began annual maintenance on Monday. Governments,
markets and companies are worried the shutdown might be extended
because of the Ukraine war.
The Federal Reserve is also expected to hike rates further
than peers including the European Central Bank.
Traders ramped up bets after the inflation print that the
U.S. central bank could raise rates by 100 basis points when it
meets on July 26-27. A hike of at least 75 basis points is seen
as almost certain.
Atlanta Fed President Raphael Bostic on Wednesday said that
the higher-than-expected June inflation might require
policymakers to consider an increase of 100 basis points at the
The ECB is expected to raise rates by 25 basis points at its
July 21 meeting, the first increase since 2011.
The euro’s depreciation is unlikely to influence its rate
path. The ECB is watching the euro exchange rate because of its
impact on inflation but does not target a specific level, an ECB
The Canadian loonie gained after the Bank of Canada raised
its benchmark interest rate by a full percentage point,
surprising markets with its biggest rake hike since 1998.
The greenback fell 0.39% against the Canadian currency to
The U.S. dollar gained 0.31% against the Japanese yen to
137.33, after earlier hitting a 24-year high of 137.81.
In the cryptocurrency market bitcoin gained 2.43% to $19,791
Currency bid prices at 3:00PM (1900 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Dollar index 107.9500 108.2000 -0.22% 12.844% +108.5900 +107.4700
Euro/Dollar $1.0061 $1.0036 +0.26% -11.49% +$1.0122 +$0.9998
Dollar/Yen 137.3300 136.8750 +0.31% +19.27% +137.8600 +136.6900
Euro/Yen 138.18 137.37 +0.59% +6.03% +138.7900 +137.1300
Dollar/Swiss 0.9794 0.9821 -0.28% +7.37% +0.9829 +0.9752
Sterling/Dollar $1.1905 $1.1885 +0.17% -11.97% +$1.1966 +$1.1828
Dollar/Canadian 1.2967 1.3021 -0.39% +2.58% +1.3060 +1.2938
Aussie/Dollar $0.6768 $0.6757 +0.16% -6.89% +$0.6803 +$0.6726
Euro/Swiss 0.9852 0.9854 -0.02% -4.99% +0.9883 +0.9807
Euro/Sterling 0.8450 0.8438 +0.14% +0.60% +0.8468 +0.8404
NZ $0.6137 $0.6127 +0.23% -10.28% +$0.6171 +$0.6081
Dollar/Norway 10.1810 10.2520 -0.70% +15.56% +10.2825 +10.1440
Euro/Norway 10.2454 10.2876 -0.41% +2.32% +10.3055 +10.2413
Dollar/Sweden 10.5393 10.5637 -0.07% +16.87% +10.6232 +10.4750
Euro/Sweden 10.6041 10.6110 -0.07% +3.62% +10.6326 +10.5940
(Reporting by Karen Brettell; additional reporting by Sinead
Carew in New York; editing by Jonathan Oatis and Rosalba