In world markets, the value of the dollar against a basket of currencies fell significantly last week as the ceasefire between the United States of America and Iran boosted investors’ hopes of an easing of the crisis in the Middle East.
The dollar index, which shows the value of the US currency against six major world currencies, fell 1.5 percent last week to 98.70 points.
At the same time, the dollar weakened against the European currency by 1.7 percent, so the exchange rate of the euro reached $1.1720.
Strong growth of world stock markets
In March, the dollar strengthened significantly against most of the world’s most important currencies as investors, due to the crisis in the Middle East, sought refuge for their capital in safer investments.
It fell sharply last week as an agreement on a two-week ceasefire between the United States and Iran raised investor hopes that the crisis in the Middle East could soon end.
The dollar is supported by expectations that the Federal Reserve will not cut interest rates this year because, due to higher oil prices, inflation in the US is rising.
Inflation in the USA
The latest data show that in March, consumer prices in the USA rose by 3.3 percent on an annual basis, mainly due to a jump in energy prices by almost 11 percent, reports HRT.
This shows that inflation has moved significantly away from the Federal Reserve’s target levels of around 2 percent.
Before the attack of the United States of America and Israel on Iran, investors expected that the Federal Reserve would cut interest rates twice this year by 0.25 percentage points, but now no interest rate cut is expected this year.
As no agreement was reached between American and Iranian negotiators on the conditions for lasting peace in Islamabad on Saturday, it remains to be seen what will happen next week in the global financial and oil markets.
