The dollar index re -strengthened at the opening of the European session after struggling to hold on to the previous session as investors prepared for US inflation data this weekend.
The increase also followed a rebound in US 10 -year bond yields which rebounded above 3.00%.
Even with the strengthening US dollar, the euro remains resilient ahead of the European Central Bank (ECB) policy meeting on Thursday which is expected to offer a hawkish statement on interest rate hikes.
These expectations drove the euro to a 7 -year high against the yen which continues to suffer due to the dovish stance of the Central Bank of Japan (BOJ) to remain on a loose policy.
The yen also weakened to a 20 -year low against the greenback, as the latest data showed the Japanese economy contracted at an annual rate of 0.5% in the first quarter of 2022.
Meanwhile, the pound returned to reduce gains in the previous session to trade at around 1.2500 against the US dollar.
On the other hand, the Aussie and New Zealand dollars also recorded depreciation following the re -strengthening of the US dollar, bringing the kiwi dollar to a two -week low while the Aussie was one week.
The loonie dollar was stronger, supported by strength in world crude oil trade and continued policy tightening by the Central Bank of Canada (BOC) amid the country’s recovering economy.
