Dollar hits two-decade high, rattled investors plump for safe haven

Dollar hits two-decade high, rattled investors plump for safe haven

Dollar Index

Dollar Index is trading up 0.40% at 104.30

The dollar rose to fresh two-decade highs on Thursday as concerns that tighter monetary policies to tame surging inflation will hurt the global economy dampened risk sentiment and drove investors into safe-haven currencies.

Data on Wednesday showed U.S. consumer price growth slowed sharply in April, suggesting that inflation had probably peaked, though it was likely to stay hot.

The data confirmed expectations for further aggressive hikes in interest rates by the Federal Reserve. Asian stocks fell to an almost two-year low, European shares tumbled and oil prices were down 2%.

The dollar index, which measures the greenback’s strength against a basket of six currencies, rose 0.4% to 104.45, after hitting its highest since December 2002 at 104.54.

Shanghai authorities combed the city on Thursday for its last COVID-19 cases to clear the way for an exit from a painful six-week lockdown. China’s yuan fell as low as 6.8292 per dollar, its lowest level since September 2020, down 0.7%.

The Aussie and the kiwi dollar fell around 1% against the greenback to their lowest since June 2020.

On technical fronts DOLLAR INDEX RSI stood at 61.42 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss:

TRADE SIGNAL – : DOLLAR INDEX – BUY: 104.41, TARGET: 104.58, STOP LOSS : 104.36

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