Dollar Stronger, Inflation Fears Spur Buying

The U.S. dollar gained against a basket of major currencies on Friday (May 20) as investors bought the greenback as a safe haven amid concerns about the impact of rising inflation.

  • The dollar index, against the six major currencies in a basket of currencies, was up 0.41% to 103.1490.
  • The US dollar strengthened against the yen at 127.80 yen from 127.74 yen.
  • The dollar strengthened against the Swiss franc at 0.9758 francs from 0.9705 francs.
  • The dollar was higher against the Canadian dollar at 1.2847 Canadian dollars from 1.2800 Canadian dollars.
  • The euro was lower against the US dollar at $1.0550 from $1.0603.
  • The pound fell to $1.2471 from $1.2501.
  • The Australian dollar weakened to $0.7020 from $0.7063.

The dollar gained further momentum as Federal Reserve Chairman Jerome Powell insisted that the Fed would not hesitate to raise interest rates to curb inflation.

CME Group’s FedWatch tool shows that investors are now 100% betting on a Fed rate hike of at least 0.50% at the other two monetary policy meetings in June and July. The Fed raised rates by 0.50% in May for the first time since May 2000, the largest rate hike in more than 20 years.

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