News (Buissness/Economy) Both EUR/USD and GBP/USD go down to levels not seen since the begining/mid worst time the US was hit by COVID last year!

[Amol S.]

Today after the closing bell (4:00 PM) EUR/USD has broken below the $1.16 level and to a value that has not been seen since around July 23 around last year. At the closing bell the Euro was at approximately $15.935, which is down by almost $0.009 from yesterday’s value.





Furthermore, the British Pound at the closing bell has gone down to values not seen since around December 22-23 of last year, talk about being close to Christmas of last year. The British Pound compared to the US Dollar was at around 1.34185, which is shockingly down by almost $0.01154 from yesterday’s values.




The U.S. seems to be getting back on track. This trend is expected to increase as the Federal Reserve has stated it will start to go back to its normalized interest rates as it was pre-pandemic. This is occurring even in the time where a U.S. government shutdown is looming over the horizon, showing that investors fears of a government shutdown in the US is being outweighed by other factors showing growth in the US economy. Furthermore, the impact that has been caused by Brexit is now showing is negative effects, some of which surprised those that have thought before Brexit would not occur.

https://www.reuters.com/business/dollar-2021-highs-even-us-government-shutdown-looms-2021-09-29/l

(REUTERS) The dollar surged on Wednesday to a one-year high against major currencies, boosted by increased expectations for a reduction in the U.S. Federal Reserve's asset purchases starting in November and an interest rate hike, possibly in late 2022. The greenback also fared well despite an impasse in Washington over the U.S. debt ceiling that threatened to plunge the government into a shutdown. The world's largest reserve currency, seen as a safe-haven bet at times of market stress, has strengthened in recent days as investors instead focused on fears of a global slowdown, a rise in energy prices and higher U.S. Treasury yields. Traders are also concerned the Fed will start to withdraw policy support just as global growth slows. "Fed has sounded the starting gun on monetary policy normalization," wrote Kit Juckes, macro strategist, at Societe Generale in his latest research note. "As the U.S. escapes the interest rate zero-bound, leaving the Eurozone and Japan behind, the global savings glut is set to be drawn towards the dollar, which can outperform the majority of other currencies in the coming year, and may start its move earlier than we expected," he added.

 

[ElFenix]

rising US interest rates tend to suck all the money out of the rest of the world.

 

[Amol S.]

rising US interest rates tend to suck all the money out of the rest of the world.

How is that? I do not know much about internest rates effect on the world. The only interest rate I know about is the one that is printed on my bank statements.

 

[ElFenix]

How is that? I do not know much about internest rates effect on the world. The only interest rate I know about is the one that is printed on my bank statements.

getting a certain return on your investment in dollars is better than getting less certain returns on your investment in reals. so if US interest rates rise (and it doesn't take much movement to double them right now), you're going to strongly reconsider your investment in brazil.