Dollar rises as hawkish central banks dent risk sentiment, sterling slips

The US dollar gained support from risk aversion as hawkish comments from global central banks sparked concerns that monetary tightening could lead to a deeper economic downturn. Although higher rates are typically supportive for currencies, there are concerns they could trigger a recession, leading some investors to seek safe-haven assets such as the US dollar. Sterling struggled to hold gains from a larger-than-expected 50-basis-point rate rise from the Bank of England in response to inflation, and was set for a weekly loss of over 0.5%. Meanwhile, the Australian and New Zealand dollars fell amid the volatility.