The US dollar settled amid widespread selling in the stock market on Wednesday and is trading near its lowest level in several months, as markets await the FOMC meeting minutes to see any change that could shed light on its monetary policy outlook.
But the spotlight was on the cryptocurrencies today, as it retreated in the wake of regulatory moves from China, and Bitcoin fell to its lowest level since January, to fall by more than 24% during the current week's trading, and by more than 40% since the beginning of April, in the wake of China's decision to ban financial institutions and payment institutions from providing digital currency services, while rival cryptocurrency Ethereum plunged by 28% to around $ 2,375.
Inflation pressures are mounting, with recent data showing the extent to which the imbalance between supply and demand has caused prices to rise as material producers struggle to keep up with the reopening of the economy. This has raised concerns that the Federal Reserve may raise interest rates sooner than expected, despite central bank assurances that the current rate hikes are temporary.
The dollar index, which measures the greenback against a basket of world currencies, is at 89.88 and is nearing support near 89.20 levels. The minutes of the last meeting of the Federal Reserve, due for release later today, are widely expected to confirm the intention of policymakers to continue down the current path and leave key interest rates close to zero for the foreseeable future. Meanwhile, the US Treasury yields have changed little.
Also, price pressures continue elsewhere, as UK inflation more than doubled in April to 1.5% from the previous month, sparking similar long-term inflation concerns. The pound retreated against the US dollar and traded below the 1.4140 levels.
Canada also released its latest inflation data, which showed consumer prices climbing to an annual rate of 3.4%.
On the other hand, the US major stock indices continued to decline for the third day in a row as investors dumped riskier assets amid fears that high inflation will force the Federal Reserve to reduce its support for the economy soon.