The most important currency pair in the world, the Eurodollar, has an exchange rate of around 1.16. In Poland you have to pay almost 3 cents more for American currency. Market strategists are following the subsequent comments of the US President with interest, which can significantly influence the quotations, but only temporarily.
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“The dollar was making up for losses on Tuesdayas investors remain skeptical about the possibility of a quick end to the war in the Middle East,” writes CNBC.
It recalls that Donald Trump said on Monday that the US and Iran were conducting “very good and productive” talks on “a complete solution to hostilities in the Middle East.” However, Iran quickly denied that it was conducting any direct negotiations.
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As Rodrigo Catril, currency strategist at National Australia Bank, said, quoted by CNBC, the US president's comments “at least they provided some respite in financial markets, but it is hard to believe that they will trigger a greater appetite for risk“.
The dollar is gaining against the euro. How does it compare to the Polish zloty?
The most important currency pair in the world, i.e eurodollar, on Tuesday around 16 was around 1.16. This means a decline in the value of the euro by approximately 0.2%. and a simultaneous slight strengthening of the dollar.
The dollar also gained slightly against the Polish currency. On Monday evening, the exchange rate was around PLN 3.66, and several hours later exceeded PLN 3.69.
The euro rate chart looks similar the exchange rate increased from PLN 4.25 to PLN 4.27.
The dollar index, which measures the value of the U.S. currency against a basket of currencies, rose 0.2% on Tuesday. to 99.362 after a decline of 0.4%. to a nearly two-week low on Monday.
The index rose 1.7% this month, the biggest monthly gain since October, as the conflict also boosted demand for safe havens.
Currency rates, the conflict in the Middle East and interest rates
Tommy von Bromsen, a currency strategist at Handelsbanken, was quoted by CNBC as saying that Donald Trump's comments were a signal that he was seeking to end the war. “When this is over, I think we will see a reversal of the current currency fluctuations, which will mean a weakening dollar” – announced the analyst.
See also: ECB interest rates to change? The head of a large bank talks about the risks
The expected impact of rising energy prices on inflation has also led markets to temper expectations for Federal Reserve interest rate cuts, although investors are not yet pricing in any policy tightening this year, unlike other major central banks.
Markets are considering at least two interest rate increases from the European Central Bank and the Bank of England this year.
