The suffering of most major currencies worsened in the European session as the king of the US dollar continued to maintain a strengthening at a 20 -year high.
A string of data showing U.S. inflation remains the highest in 40 years, investors continue to place confidence in the Federal Reserve (Fed) to extend its monetary tightening this year.
However, this tightening has sparked concerns that it will stifle global growth for which most countries are still struggling with recovery from Covid-19 and face the new threat of a Ukraine-Russia war.
These concerns were evident in the UK’s gross domestic product (GDP) readings which showed slower growth in the first quarter causing the pound to be dragged to its most recent two -year low.
Meanwhile euro trading also suffered by plunging to its latest low since January 2017 despite European Central Bank (ECB) policymakers increasingly vocal that it was time to implement tightening.
Most recently, ECB policymaker Peter KažimÃr in a tweet on his Twitter page said his readiness for an interest rate hike in July.
Meanwhile, the Aussie dollar and kiwi commodity currencies also gave in to the strength of the US dollar to trade at their weakest level in almost two years, while the loonie was at a 17 -month low.
After the consumer price (CPI) data, the US producer price (PPI) report will be the next investor's focus in the New York session, which will confirm the strength of inflation at a 40 -year high.
