Dollar closes week with losses due to Fed comments
2023.03.03 11:45
Dollar closes week with losses due to Fed comments
By Tiffany Smith
Budrigannews.com – In early European trading on Friday, the U.S. dollar fell, putting it on track for a weekly loss due to uncertainty over the extent of the Federal Reserve’s planned tightening path.
The, which compares the dollar to a basket of six other currencies, was 0.2% lower at 104.782 at 02:55 ET (07:55 GMT), down from its two-month high of 105.36 at the beginning of the week.
This week’s 0.4% decline would mark the first losing week since January for the dollar index.
Following remarks made by the president of the Atlanta Federal Reserve, there was a suggestion that the may maintain its moderate monetary tightening policy for the market.
Bostic argued for a 25-basis-point hike later this month and advocated for “slow and steady” as the Fed’s best course of action, noting that the impact of higher interest rates may only begin to be felt in the spring.
Traders had been under the impression that the U.S. central bank could implement a 50 basis point rate hike within the next two weeks due to a string of robust economic data releases, including inflation proving to be sticky at elevated levels.
Elsewhere, it rose 0.2 percent to 1.0617, coming off a low of 1.0533 at the beginning of the week that was close to a two-month low.
In the Eurozone this week came in higher than expected, pointing to additional interest rate hikes by the in addition to the 50 basis points that have already been predicted for mid-March.
Thursday, ECB President Christine Lagarde stated that policymakers will do everything in their power to bring inflation back below the target of 2% from the current high of 8%, so interest rate increases may need to continue beyond the planned move.
In light of the region’s high inflation numbers, Morgan Stanley raised its forecast for the ECB’s terminal rate earlier on Friday from 3.25 percent to 4 percent.
The key rate set by the central bank is currently 3%.
Increased by 0.3 percent to 1.1980, remaining below 1.20, as expectations grow that the U.K. economy will weaken before its major peers.
Decreased by 0.2 percent to 136.47, helped by a decrease in U.S. yields. On Friday, data showed that inflation had fallen from a 40-year high in February but was still relatively high.
Increased by 0.2 percent to 0.6227, increased by 0.3 percent to 0.6750, and decreased by 0.2 percent to 6.9018 following data indicating a recovery in the world’s second-largest economy in February.
