Dollar loses steam, euro on front foot

Singapore, Jul 20 (BNA): The US dollar fell further as the euro continued to rebound overnight amid relief Europe may avoid the worst energy shortage fears, and on the chance that the European Central Bank will raise interest rates more aggressively.

The euro rose 0.25% to $1.0245, after rising 0.75% the day before, its strongest daily gain in a month.

Helping news was that the European Central Bank was considering raising interest rates by 50 basis points larger than expected, Reuters reported.

The euro has lost about 2.3% since the beginning of July and broke parity with the dollar for the first time in two decades last week in the wake of rising inflation in the US and fears of a sharp economic downturn in the eurozone.

The US dollar index against a basket of major currencies fell 0.14% to 106.52, away from a two-decade high of 109.29 last week.

The decline in the greenback also coincided with lower expectations for a 100 basis point interest rate hike at the Federal Reserve policy review next week.

The Australian dollar rose 0.4% to $0.6925, after rising 1.3% overnight and its biggest in a month.

Markets are placing a 23.2% chance of 100 basis points.

The Japanese yen remained in a steamy state and was last traded at 138.155 to the dollar, as the Bank of Japan appears determined to stand by its pessimistic stance.

Bitcoin settled at $23,300, against a five-week high the day before.

ZHB