The US dollar continued to strengthen in the European session after the latest inflation data further strengthened investor confidence for a more aggressive interest rate hike from the Federal Reserve (Fed).
The surge in inflation to its latest high in almost 40 years has sparked panic in the market and has certainly also intimidated the US central bank to act quickly.
St. Louis Fed President James Bullard said he proposed a 100 basis point increase in July with a 50 basis point increase set to take place in March.
These expectations have pushed the surge in 10 -year U.S. bond yields to their highest peak since August 2019 at 2% and also pulled the U.S. dollar to a stronger return.
Meanwhile, the euro is under pressure to maintain its position at 1.1400 against the greenback dollar.
The European Central Bank (ECB) which was previously considered hawkish, is in fact still maintaining its dovish stance due to the uncertainty displayed by the European economy.
The commodity -linked currency, the kiwi dollar is on track to record its second weekly gain although price movements are seen to have wiped out some of its gains this week.
The Aussie dollar is trying to hold back from falling lower following a statement by the Governor of the Australian Central Bank (RBA) who is still cautious in signaling an interest rate hike this year.
