Forex, bonds, commodities – The Fed weakens the dollar economy

The euro increased its gains compared to the previous evening on Thursday. The common currency climbed to $ 1.1890, its highest level since early July. The euro received a boost from a weaker dollar, which was weighed down by US Federal Reserve decisions on Wednesday night. After its interest rate meeting, the Fed gave indications of a less generous predictable monetary policy. Central Bank Governor Jerome Powell remained vague and said the situation in the labor market in particular was not yet sufficient to be more precise. The euro was also supported by economic data from the euro area. The business climate there had reached a record level as part of the pandemic easing measures.

With monetary policy still accommodating, many investors have turned to gold. The precious metal’s troy ounce rose more than one percent to $ 1,831.

In contrast, German government bonds were sold. In turn, the yield on the relevant ten-year federal bond fell from minus 0.447 at times to minus 0.424%. The sales trigger was a surge in inflation in Germany in July to 3.8% from the same month last year. In June, it was 2.3%.

Prices in the oil market continued to rise. A barrel of North Sea Brent cost $ 75.73, 1.3% more than the night before. The price of the American variety WTI also rose 1.3 percent to $ 73.32. Oil prices were boosted by the weak dollar. Since crude oil is traded in the US currency, a falling dollar makes the raw material cheaper for interested parties outside the dollar area and often increases their demand. The oil market was also supported by inventory data from the United States. Last week, crude oil inventories were at their lowest level since early 2020.

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