The dollar index rises to its highest level in five weeks

The US dollar index hit a five-week high on Monday after another Federal Reserve official indicated that monetary tightening may remain strong ahead of the central bank’s Jackson Hole seminar this week.

The euro fell to its lowest level in five weeks after Russia announced a three-day halt to European gas supplies through the Nord Stream 1 pipeline at the end of this month, exacerbating the energy crisis in the region.

The Chinese yuan fell to its lowest level nearly two years after the central bank cut key lending rates, adding to a series of monetary easing measures to support the economy suffering from the restrictions of Covid-19 and the real estate crisis.

The dollar index, which measures the currency’s performance against six major currencies, including the euro, rose to 108.26 for the first time since July 15 and last rose 0.074 percent to 108.23.

The dollar rose against the yen, which is highly sensitive to US yields, to 137.40 Japanese yen, the highest level since July 27.

The dollar rose to 6.8308 yuan in internal trading for the first time since September 2020 after the People’s Bank of China cut its key interest rates for one- and five-year loans, as widely expected. This came after the bank eased borrowing costs in a surprise move last week.

Against the offshore yuan, the dollar reached 6.8520, also its highest level since September 2020.

Meanwhile, the euro fell to its lowest level to $ 1.0026 for the first time since July 15, before trading down 0.13 percent at $ 1.0027.

Sterling fell 0.23 percent to $1.1805, approaching a five-week low on Friday at $1.17925.