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Dollar pauses for breath as fragile pound edges up
Published by Jessica Weisman-Pitts
Posted on September 27, 2022
4 min readLast updated: February 4, 2026
Global Banking & Finance Review®
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Published by Jessica Weisman-Pitts
Posted on September 27, 2022
4 min readLast updated: February 4, 2026
By Alun John and Tom Westbrook
LONDON/SYDNEY (Reuters) – The dollar took a pause on Tuesday in what has been a relentless climb higher as under-fire sterling as well as the euro and Japanese yen recovered some ground from multi-year lows, but medium-term fundamentals were still in the greenback’s favour.
Sterling climbed over 1% to $1.0810, on track for its biggest daily percentage gain in nearly seven weeks, the euro rose 0.2% to $0.9629, and the dollar slid 0.3% against the yen to 144.28.
The decline in the dollar was broadly in line with a recovery in markets’ sentiment towards riskier assets, which also boosted European stocks and U.S. share futures, and was helped by U.S. treasury yields steadying after their recent gains.
“We’ve seen some people trimming their long dollar positions a bit, but we’re looking to the New York open to see how those treasury yields are going to play throughout the day,” said Simon Harvey, head of FX analysis at Monex Europe.
“All it needs is them to pick up a bit and the risk environment becomes less supportive and then you start wondering what happens to UK investor sentiment. This brief flurry of strength in the pound feels like it’s on shaky ground.”
Tuesday’s moves were minor compared to the dollar’s significant recent gains. The euro was still near its 20-year trough hit a day earlier, and the yen was just off its 24-year nadir hit last week before Japanese authorities intervened to strengthen the currency.
Sterling was not too far from its record low of $1.0327 hit Monday, the end of a plunge that began Friday when markets were spooked by Britain’s gambit of relying on unfunded tax cuts to spur growth, which also sent short-term gilt yields up 100 basis points in two days.
Investors will watch an appearance by the Bank of England’s chief economist, Huw Pill, at a panel event beginning at 1100 GMT.
The central bank on Monday said it would not hesitate to change interest rates and was monitoring markets “very closely”, though did not take any immediate action.
Broad fundamentals are still pointing to a stronger dollar in the medium term.
“Everyone’s got this hope that the dollar is peaking and peaking and peaking, but it’s just been far too premature,” said Paul Mackel, global head of FX research at HSBC.
“The Fed is firmly hawkish and global growth is weakening, and you put those forces together alongside higher elements of risk aversion – it’s all pointing to a strong dollar if not a strengthening dollar.”
The dollar index was at 113.6, down 0.5% on the day, but still near its 20 year top of 114.58 hit the day before.
The Aussie and kiwi, which hit 2-1/2 year lows on Monday, were also on the rebound, with the Aussie up 0.57% to $0.6490 and the kiwi up 1.2% to $0.5702. [AUD/]
Bitcoin, which also often moves in line with risk sentiment, hit a 10-day top and was last up over 5% at around $20,200
========================================================
Currency bid prices at 1055 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar
$0.9629 $0.9609 +0.22% -15.29% +0.9670 +0.9584
Dollar/Yen
144.2800 144.7000 -0.28% +25.46% +144.7050 +144.0800
Euro/Yen
138.93 139.07 -0.10% +6.61% +139.5400 +138.7100
Dollar/Swiss
0.9869 0.9926 -0.56% +8.21% +0.9941 +0.9859
Sterling/Dollar
1.0805 1.0690 +1.09% -20.09% +1.0837 +1.0651
Dollar/Canadian
1.3677 1.3728 -0.37% +8.17% +1.3741 +1.3641
Aussie/Dollar
0.6492 0.6459 +0.51% -10.69% +0.6513 +0.6452
NZ
Dollar/Dollar 0.5706 0.5635 +1.27% -16.63% +0.5722 +0.5635
All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Reporting by Tom Westbrook; Editing by Sam Holmes and Mark Potter)
Foreign exchange, or forex, is the global marketplace for trading national currencies against one another. It is the largest financial market in the world, with a daily trading volume exceeding $6 trillion.
A currency exchange rate is the value of one currency for the purpose of conversion to another. It indicates how much of one currency you need to spend to purchase a unit of another currency.
The dollar index measures the value of the United States dollar against a basket of foreign currencies. It is used to gauge the strength of the dollar in the global market.
Sterling refers to the British pound, which is the official currency of the United Kingdom. It is often denoted by the symbol £ and is one of the oldest currencies still in use.
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