Reuters, Singapore :
The US dollar surged to a 20-year high against a basket of currencies on Monday after Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down soaring inflation. The dollar index scaled to a fresh two-decade peak of 109.44 in the Asia trade, with greenback strength pushing other major currencies to new lows and putting pressure on its emerging markets counterparts. The dollar hit 138.88 against the Japanese yen , the highest since July 21, while the offshore yuan fell to a fresh two-year low of 6.9321 per dollar.
Sterling also fell to a 2-1/2-year low of $1.1656 and was last down 0.61 per cent to $1.1658, while the euro fell 0.49 per cent to $0.9916. The moves extended dollar gains made on Friday when Powell warned there’d be “some pain” for households and businesses as it will take time for the Fed to control inflation. read more
“Powell made it clear that there is no dovish pivot as some market participants had expected,” Carol Kong, senior associate for currency strategy and international economics at Commonwealth Bank of Australia.
