There are no strong points on the dollar, the pound is plunged by the data

The USD index is rising today to the highest level since July 2020, which may be influenced by expectations of interest rate hikes in the US. Jerome Powell, boss Federal Reservehe said yesterday that the US central bank is committed to hike interest rates quickly to bring inflation down. He added that already in May there may be a rate hike by 50 basis points. The Fed chief also noted that apart from harmful inflation, the US economy seems very strong and the labor market is in a good shape.

Hopes for interest rate hikes strengthen the USD

Powell's words could help the US currency. The USD index has been gaining for the third consecutive week. Importantly, following Powell's speech on Thursday in a panel organized by International Monetary Fund, opinions appeared on how the monetary policy in the US may be shaped. Bank Nomura went the furthest in its forecasts, pointing to the possibility of hikes by as much as 75 basis points in both June and July.

The pound may envy the dollar

While in the currency market the dollar seems to attract attention with its growing strength, the British pound may attract attention with its relative weakness. The macroeconomic data from Great Britain may have contributed to the decline in GBP.

Retail sales in the UK fell by 1,4% in March, which seems to be much worse than the market forecasts of 0,3%. Data indicate that British consumers may be holding back their purchases due to rising prices. What's more, GfK Consumer Confidence Index dropped in the UK to its lowest level since July 2008, minus 38 points.

Consequently GBP / USD rate it seems to be losing close to 1% today, reaching the lowest level since the end of 2020. Yesterday the quotes could have been at 1,3030, to drop today to 1,2900.

Lifebuoy for the yen

Among the world's major currencies, the Japanese yen may lose even more than the pound to the dollar, around 10% since the beginning of the year. Today quotes USD / JPY they are trying to stabilize below the level of 130,00. The talks between the Japanese finance minister and the American treasury secretary are to help in this. Their goal would be to take joint steps to stop the sharp change in the USD / JPY exchange rate.