Gbp And Eur At 6 Month Lows

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Gbp And Eur At 6 Month Lows

Pound (GBP) And Euro (EUR) At 6-Month Lows Against US Dollar

During Wednesday's session, the US Dollar managed to touch its 10-month high and pushed the GBP & EUR to 6-month lows. At the same time, the Japanese Yen (JPY) has also entered into BoJ intervention territory. All of this is driven by the fact that the US authorities will not change the current high-interest rates.

Although some sell-off was seen in the US T-bond yields recently, it has stabilized since then. Similarly, we can't ignore the fact that the T-bond yields at only a little below its 16-year highs. That's the primary reason why the greenback (USD) is showing its muscles against the GBP, JPY, & other currencies.

EUR & GBP Down By 0.3% And 0.2%

The Euro (EUR) was seen trading near 1.0534 against the USD with a 0.3% downside. These levels were only last seen on 15th March & thus signify a major shift in the Euro's trend.

If the Euro continues on this path, it will end up losing 3% of its value by the end of September. Similarly, the Euro's recent quarter will also be one of its worst for the year 2023.

A closer look at the Pound Sterling (GBP) reveals it is also down by 0.2% and currently trades near 1.2134. On a quarterly basis, the GBP is all set to lose 4% of its value.

In addition, the USD index is currently trading near 10.649 (a 10-month high) and represents the collective strength of the dollar against other currencies.

According to Nordea's senior strategist, the markets now firmly believe in higher interest rates and higher bond yields for a long time. That's the key driver which is sending the US Dollar higher. They also added that the recent 4.5% yield of the 10-year bonds is also one of the highest in the last few years.

According to the Fed officials, they can't rule out any additional rate hikes if the condition requires it! So, on that front, the sentiment is most definitely hawkish and is thus pushing the EUR & GBP down.

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