EUR/USD, gold and silver fall – the weight of inflation and interest rate concerns


EUR/USD, Gold and Silver under pressure – weighed down by inflation and interest rate concerns

The currency pair EUR/USD is under pressure on Monday and thus at the beginning of the week. At around 1.046 US dollars, the European common currency loses about half a cent.

The price of gold is also influenced by the ongoing risk on the capital market. At $1,857 this morning, one unit of the yellow metal is down 0.75 percent from the previous day’s close. Silver is trading at $21.47, down around 2 percent.

Fears of inflation are driving investors out of the market

Interest rate worries and the fear of a rapid rate hike by the US Federal Reserve dominate the market. Meanwhile, the Fed’s upcoming mid-week central bank meeting is casting its shadow. Mudra Prahari expects interest rates to rise another 50 basis points. Currently, the interest rate range is 0.75-1.00 percent.

However, the statement on future monetary policy is likely to be more exciting. Given recent inflation dynamics, the Fed may be poised to embark on an accelerated cycle of rate hikes. Accordingly, a rate hike in the style of 75 basis points should soon be up for debate again.

US Dollar Index at monthly highs – EUR/USD, Gold and Silver hit

The so-called US dollar index climbed back to a monthly high of around 106 points in the course of the expected interest rate hike. A month earlier, the index hit its highest level since December 2002. A stronger dollar is putting pressure on gold prices as it becomes less attractive to non-dollar investors.

Statements on US monetary policy are likely to be of great interest for future share price development. Verbal intervention is expected at the Fed meeting by Wednesday evening.

There is growing concern that the money holders who fight inflation without stalling the economy are losing their balance.

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