Sharjah24 - Reuters: The U.S. dollar edged higher on Wednesday, on pace to snap a three-session losing streak, as concerns about the outlook for global economic growth and rising inflation knocked sentiment, a day after U.S. Federal Reserve Chair Jerome Powell struck a more hawkish tone.
On Tuesday, Powell pledged the U.S. central bank would ratchet up interest rates as high as needed, including taking rates above neutral, to curb a surge in inflation that he said threatened the foundation of the economy.
The neutral rate is the level at which economic activity is neither simulated nor constrained and is widely expected to be somewhere in the region of 3.5% by mid-2023.
"Yesterday's risk rally appears to have been, predictably, short-lived, having fizzled out almost entirely in this morning's trade," said Michael Brown, head of market intelligence at Caxton in London.
"Consequently, haven USD demand has re-emerged, with something of a 'flight to cash' taking place, with Treasuries failing to find bids despite the shaky sentiment," Brown said.
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