London (awp/afp) – The dollar accentuates its decline on Thursday, partially correcting its spectacular rise of almost 2% on Wednesday with the election of Donald Trump, while the pound advances after fears from the Bank of England about the inflationary effect of the new British budget.
Around 4:10 p.m. GMT (5:10 p.m. in Paris), the American currency fell by 0.62% against the euro, to $1.0796.
After climbing up to +1% against the greenback, the pound rose by 0.84%, to 1.2989 dollars, and took 0.22% against the single currency, to 83.11 pence for one euro, in despite the British central bank's (BoE) decision on Thursday to reduce its interest rates by 0.25 points, to 4.75%.
Because if the BoE says it is satisfied with the current level of inflation, it also believes that the spending planned in the new British budget, presented last week, will generate inflation in the medium term, which is pushing up the currency.
The Federal Reserve (Fed) must also decide on its rates on Thursday, with analysts also expecting a drop of a quarter of a point.
For Commerzbank analyst Antje Praefcke, the result of the US presidential election “will not change anything in the Fed's monetary policy in the short term”.
Faced with calmed inflation, “the Fed can further lower its key rate in order to become less restrictive” and revive the economy, he explained.
Above all, the market partly corrects the crazy surge in the dollar on Wednesday, driven by the inflationary policies included in the Republican's program, which fuels expectations of higher rates in the longer term in the United States.
Investors also anticipate a “rapid reaction from the European Central Bank (ECB)” to counter the fall of the euro and deal with the new customs tariffs envisaged by the new American administration, underlines Ipek Ozkardeskaya, analyst at Swissquote.
The currencies of the Scandinavian countries also climb after announcements from their respective central banks on Thursday, to +2.14% against the dollar for the Norwegian crown, and +1.46% for the Swedish.
In Sweden, the Riskbank lowered its key rate by 0.5% on Thursday to 2.25%. The currency is rising as the market expected the decline and data on Swedish inflation in October showed a stronger rise than expected.
The Norwegian central bank, for its part, kept its key rate unchanged on Thursday, at 4.50%, at the highest level in 16 years, and reiterated that it would keep it like this until the end of the year.
Cours de jeudi Cours de mercredi 16H10 GMT 22H00 GMT EUR/USD 1,0796 1,0729 EUR/JPY 165,26 165,91 EUR/CHF 0,9418 0,9405 EUR/GBP 0,8311 0,8331 USD/JPY 153,07 154,63 USD/CHF 0,8724 0,8766 GBP/USD 1,2989 1,2979
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