# Dollar stronger as inflation worries dampen risk sentiment Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-05-31 Category: TRADING Category URL: https://financedigest.com/category/trading Meta Title: US Dollar Rises Amid Inflation Worries and Rising Treasury Meta Description: The U.S. dollar rose as Treasury yields climbed, investors worried about global inflation, and U.S. stocks fell on soaring oil prices and hawkish Fed comments. URL: https://financedigest.com/dollar-stronger-as-inflation-worries-dampen-risk-sentimenthtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-05-31t141638z1lynxmpei4u0m1rtroptp4global-forex-1736815672673-compressed.jpg) By Saqib Iqbal Ahmed NEW YORK (Reuters) – The U.S. dollar rose across the board on Tuesday as Treasury yields climbed and [worries over a further acceleration in global inflation kept investors’](https://www.financedigest.com/hotel-investors-should-they-be-worried-about-a-potential-economic-pause-delving-into-inflation-interest-rates-recession-etc.html "‘Hotel Investors – should they be worried about a potential economic pause?’ delving into inflation, interest rates, recession etc") risk appetite at bay. The [dollar was supported by demand](https://www.financedigest.com/dollar-demand-persists-even-as-stocks-recover.html "Dollar demand persists even as stocks recover") for havens. U.S. stocks fell on Tuesday as soaring [oil prices and hawkish comments from a Federal Reserve](https://www.financedigest.com/oil-prices-dip-on-u-s-crude-reserve-release-inflation-pressure.html "Oil prices dip on U.S. crude reserve release, inflation pressure") official spooked investors. U.S. Treasury yields climbed on Tuesday, a day after Fed Governor Christopher Waller said the Fed should be prepared to raise interest [rates by a half percentage point at every meeting from now on until inflation](https://www.financedigest.com/german-inflation-rate-to-ease-over-course-of-2023-econ-minister.html "German inflation rate to ease over course of 2023 – econ minister") is decisively curbed. The U.S. [Dollar Currency](https://www.financedigest.com/u-s-dollar-advances-vs-major-currencies-as-risk-appetite-fades.html "U.S. dollar advances vs major currencies as risk appetite fades") Index, which tracks the greenback against six major currencies, was up 0.5% at 101.92, on pace for its best one-day gain in nearly two weeks. The dollar index, up about 6.6% for the year, is down 1.2% for May, on pace for its worst [monthly loss](https://www.financedigest.com/investors-flee-uk-bonds-pushing-gilts-to-huge-monthly-loss.html "Investors flee UK bonds, pushing gilts to huge monthly loss") in a year. Tuesday’s bounce in the U.S. dollar [suggests](https://www.financedigest.com/dollar-firms-after-u-s-labor-data-suggests-more-rate-hikes.html "Dollar firms after U.S. labor data suggests more rate hikes") better support for the dollar index around its 50-day moving average, which the index has been testing over the past couple of sessions, Shaun Osborne, chief currency strategist at Scotia Bank, said in a note. The [dollar index](https://www.financedigest.com/dollar-index-jumps-after-u-s-retail-sales-show-surprise-rebound.html "Dollar index jumps after U.S. retail sales show surprise rebound") has not closed below its 50-day moving average since mid-February but has drifted closer to it over the last several sessions. We think the USD is unlikely to rally significantly and still consider price action to reflect the [early stages](https://www.financedigest.com/valuing-your-early-stage-startup.html "Valuing your Early Stage Startup") of a broader reversal in the recent USD bull trend.” Osborne said. For now, the euro remained weak as data on Tuesday showed euro zone inflation hit a record high in May, adding pressure on the European [Central Bank](https://www.financedigest.com/inflation-trumps-financial-risks-as-central-bank-tightening-set-to-continue.html "Inflation trumps financial risks as central bank tightening set to continue") as it fends off a recession and looks to curb high prices with gradual interest rate increases in coming months. [Inflation in the 19 countries sharing](https://www.financedigest.com/european-shares-set-for-weekly-gain-on-u-s-inflation-outlook.html "European shares set for weekly gain on U.S. inflation outlook") the euro accelerated to 8.1% in May from 7.4% in April, beating expectations for 7.7% as price growth continued to broaden, indicating that it is no longer just energy pulling up the headline figure. Against the dollar, the [euro fell 0.6% to a 5-day low](https://www.financedigest.com/euro-rises-after-spanish-cpi-dollar-slips-towards-8-mth-low.html "Euro rises after Spanish CPI, dollar slips towards 8-mth low"). News that European Union leaders agreed in principle on Monday to [cut most oil imports from Russia by the end of this year sent oil prices](https://www.financedigest.com/tesla-cuts-u-s-model-s-and-model-x-prices-between-4-and-9.html "Tesla cuts U.S. Model S and Model X prices between 4% and 9%") higher and offered some support to commodity currencies. The Canadian dollar touched 1.2653 per dollar, near a one-month high struck overnight, ahead of Wednesday’s [Bank of Canada meeting](https://www.financedigest.com/banking-stability-worries-go-behind-closed-doors-at-imf-world-bank-meetings.html "Banking stability worries go behind closed doors at IMF-World Bank meetings") at which all 30 economists polled by Reuters expect a 50-basis-point rate hike to 1.50%. In cryptocurrencies, bitcoin climbed 0.42% to $31,363.19, a near 3-week high. (Reporting by Saqib Iqbal Ahmed; Editing by Will Dunham) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---