Dollar Consolidates Gains as Recession Fears Heighten
The dollar kicked the week off solidly, perching on a two-decade peak on Monday as fear continues to run through the markets and highlights its safe-haven appeal. The dollar index is hovering near the 105 level, its highest in 10 years.
While the US Federal Reserve’s efforts to rein in inflation were well-meaning, they’re inevitably stoking recession concerns among investors. Another bullish driver for the greenback is the slowdown of economic growth caused by the Ukraine crisis and China’s zero-COVID-19 policy.
As investors flock to the safety of the American currency, its peer currencies are being weighed down. The euro traded just off its lowest level in 4 years, while the British pound declined to $1.22.
Meanwhile, crypto markets were down on Monday after last week’s collapse of LUNA, a TerraUSD stablecoin. Bitcoin shed 5% as investors veer away from risky investments.