Band Chuck Mikolajczak

NEW YORK, March 21 (Reuters) – The dollar strengthened against a basket of major currencies on Monday, following comments by US Federal Reserve Chairman Jerome Powell that opened the door for the central bank to adopt a more aggressive monetary policy .

The greenback had fluctuated between slight gains and losses earlier in the day, and weakened slightly after comments from Federal Reserve Bank of Atlanta President Raphael Bostic. The policymaker said he expects six rate hikes this year and two for 2023, a more dovish stance than most of his colleagues as he worries about the effects of the Russia-Ukraine conflict on the US economy .

But the dollar gained ground after Powell said the central bank needed to act “quickly” to rein in too-high inflation and, if necessary, would use larger-than-usual interest rate hikes to do so.

“He keeps saying the same thing over and over again, that we need to bring inflation down and whatever it takes, that’s what we’re going to do. The market is unfortunately clinging to the old norms, which ‘they’ll make just a quarter (of a percentage point) each time,’ said Sameer Samana, senior global market strategist at the Wells Fargo Investment Institute in St. Louis.

“The Fed is sort of rewriting that playbook – we may have to go to every meeting, we may have to do something over 25 basis points, and we may have to do some rate hikes and quantitative tightening at the same time.”

Markets have been volatile over the past month as the situation in Ukraine has worsened, pushing up prices of commodities such as oil and putting upward pressure on already high inflation.

The Fed raised its key rate by 25 basis points last week for the first time since 2018 as it tries to fight rising prices while trying to avoid a policy error that could send the US economy in recession. Investors are now focusing on the potential speed and magnitude of future rate hikes.

The dollar index =USD increased by 0.123%, the euro EUR= down 0.24% at $1.1022.

Ukraine has defied a Russian demand for its forces to lay down their arms in the beleaguered port city of Mariupol before dawn on Monday.

As many central banks around the world hiked rates, with the Fed the latest to do so, the Bank of Japan maintained its massive stimulus program on Friday and kept rates stable, while warning of heightened risks from the crisis. Ukraine to a delicate economic situation. recovery.

This disparity has served to weaken the yen, with the Japanese currency trading near its lowest level in six years against the dollar despite its status as a safe haven.

European Central Bank President Christine Lagarde said on Monday that the Fed and the ECB would also become out of sync, as the war in Ukraine has very different impacts on their respective economies.

The Japanese yen weakened 0.17% against the greenback to 119.38 to the dollar, after hitting 119.46 yen, its lowest level since February 2016. JPY=EBS

Sterling GBP= last traded at $1.3168, down 0.06% on the day.

In cryptocurrencies, Bitcoin BTC= last fell 1.84% to $40,973.32 while Ethereum ETH=, ETH=BTSP latest fall of 1.33% to $2,908.60.

Global exchange rateshttps://tmsnrt.rs/2RBWI5E

(Additional reporting by Sinéad Carew; Editing by Jonathan Oatis and Andrea Ricci)

(([email protected]; @ChuckMik;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.