The Greenback Fights Against Stagnation
While investors continue to look forward to the US Dollar rally, the greenback struggles to move away from stagnation. The safe-haven currency has every reason to strengthen across the board, instead, it has been stronger only against the yield-sensitive Japanese Yen.
Aside from the USD/JPY fluctuations, the Yen is also vulnerable to oil prices. The latter has continued to climb as talks about further sanctions on Russia include banning Russian energy to Europe. As such, the Japanese currency hit a 6-year low and boosted the Nikkei 225 index by over 2.5%.
The US Dollar remains shy against other currencies even though Federal Open Market Committee (FOMC) members continue to call for a rate hike. Investors eye US President Joe Biden’s tactical visit to Europe for talks at the NATO summit.
Meanwhile, higher prices for commodities impact related currencies such as AUD, NZD, and CAD, which remain bolstered for now. The yellow precious metal is holding ground near $1,922 an ounce, but expectations are that gold is likely to shift higher.