The euro was flat at around $1.01845 after falling to $1.01615 on Wednesday for the first time since the end of 2002.
The dollar index – which measures the currency against six peers including the euro, sterling and yen – rose overnight near a 20-year peak at 107.27, last changing hands at 107.03.
German Chancellor Olaf Scholz said the country should move quickly in its green energy transition with Russia using energy as a political weapon amid the war in Ukraine.
“The risk of a US recession will weigh the dollar down from time to time, but Europe’s energy cost squeeze poses a major threat.” Eurozone Growth outlook,” Westpac’s strategists wrote in a client note.
“The DXY(dollar index) broad medium-term uptrend still remains open, leaving room for further opening up of pricing as ECB policy tightens.”
The clouds cast over the European economy just as European Central Bank It is preparing to raise the borrowing cost for the first time since 2011.
Meanwhile, the US Federal Reserve is aggressively raising rates, and the minutes of the June meeting – when policymakers tightened 75 basis points, the highest since 1994 – revealed their concern that worsening inflation. will lose faith irrigatedhas the ability to control.
Investors had been betting on a prolonged aggressively tightening campaign since that meeting as recession worries mounted, but overnight data showed US job openings in May fell short of expectations. Still points to a tight labor market that could put the Fed on the offensive.
The next major US economic release will be Friday’s jobs report for June. Economists polled by Reuters expect employers to have added 268,000 non-farm payrolls during the month.
Benchmark 10-Year treasure The yield dropped to 2.904% in Tokyo trading on Thursday, from 2.935% overnight, when conflicting cues on the policy outlook also pushed the yield to a more than one-month low of 2.746%.
The dollar-yen rate, which is highly sensitive to changes in long-term US yields, declined 0.07% to 135.79 yen, consolidating around that level after pulling back from a 24-year high of 137.00 late last month.
Analysts expect the pair to hold above 130 by the end of the year, although only seven out of 61 respondents expect it to be weaker than now, four of whom have predicted a rise to 140, according to a Reuters poll. showed.
Sterling was fighting a near two-year trough with British Prime Minister Boris Johnson to keep his job amid a growing rebellion within his party.
Investors also digested the balanced remarks of Bank of England chief economist Hu Pill, who said he was prepared to increase the pace of rate hikes based on economic data, but called for a “unilateral bold move” to be “steady-on”. hand” approach preferred. “Which can be annoying.”
Sterling was little changed since March 2020 at $1.1924 after an overnight drop at $1.1877.