Dollar falling but annual growth at its highest in 7 years

12/30/2022

3 minutes read

2022.12.30 11:56

U.S. dollar down, still on track for biggest annual gain since 2015

Dollar falling but annual growth at its highest in 7 years

Budrigannews.com – In the final trading day of a year that was dominated by concerns of a sharp slowdown in global growth and Federal Reserve rate hikes, the dollar fell on Friday but was still on track for its biggest annual gain since 2015.

On Thursday, data showing rising U.S. jobless claims, which suggested that the Fed’s interest rate hikes were lowering demand for labor, gave market sentiment on Wall Street a boost, boosting Asian equities earlier in the session.

The was down about 0.308% on the day at 103.650 due to lower liquidity because of the holidays.

In an effort to stem rising inflation, the Federal Reserve of the United States has increased interest rates by a total of 425 basis points since March.

The dollar has increased by approximately 8% against a basket of currencies as 2022 draws to a close, marking its largest annual gain in seven years. However, it has lost some of its gains in recent weeks as investors look for indications regarding when the Fed’s rate-hiking cycle might come to an end.

Adam Button, chief currency analyst at ForexLive, stated, “I think everyone is struggling with the question of whether the big problem in 2023 will be weak growth or stubborn inflation.”

The U.S. dollar will appreciate in the event of weak growth. The United States dollar will appreciate if inflation is high,” he added.

The euro was up 0.22 percent on the day, reaching $1.0684, putting it on track for a 6% annual loss against the dollar, compared to a 7% decline last year. A blend of feeble eurozone development, the conflict in Ukraine and the Federal Reserve’s hawkishness has put the euro under tension this year.

At $1.2077, the British pound was up 0.21 percent, indicating a 10.7 percent decline annually.

The Australian dollar, which is regarded as a liquid indicator of risk appetite, was up 0.12 percent on the day at $0.679, but it was on track for a 6.5% decline for the year as a whole.

At $6.9092, China’s was down 0.91% against the US dollar. Due to the strength of the dollar and a slowdown in domestic economic activity, it was anticipated to fall by 8.6% annually.

After three years of strict COVID-19 restrictions, China’s reopening has been tempered by rising infections that threaten additional economic disruptions.

The reopening of China, according to Nordea’s chief analyst Jan Von Gerich, “will be a source of volatility.”

He stated, “But when we get beyond that, when we really get to the really positive economic impact, I think it should boost risk appetite worldwide.”

The ultra-dovish stance of the Bank of Japan has seen the dollar gain 14.5 percent versus the yen so far this year, making it the yen’s worst performance since 2013. At 131.820, the U.S. dollar was down about 0.91% against the Japanese yen. Yet, the Bank of Japan’s unexpected choice to change its security yield control program saw the yen leap to a four-month high against the U.S. dollar prior in December.

At 0.92250, the Swiss franc held its value against the US dollar.

The Swiss National Bank announced on Friday that it increased the amount of Swiss currency it sold in the third quarter of 2022, indicating that its focus has shifted from containing the strength of the franc to combating inflation.

Bitcoin’s most recent decline was 1.13 percent to $16,405, a decrease of over 64% so far in 2022.

Currency bid prices at 10:00AM (1500 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 103.6500 103.9800 -0.31% 8.349% +104.1000 +103.4900

Euro/Dollar $1.0685 $1.0662 +0.23% -6.00% +$1.0700 +$1.0639

Dollar/Yen 131.8300 133.0300 -0.91% +14.51% +133.0900 +131.5050

Euro/Yen 140.90 141.81 -0.64% +8.12% +141.8900 +140.3700

Dollar/Swiss 0.9223 0.9228 -0.04% +1.12% +0.9250 +0.9200

Sterling/Dollar $1.2074 $1.2054 +0.20% -10.69% +$1.2107 +$1.2011

Dollar/Canadian 1.3543 1.3549 -0.04% +7.11% +1.3563 +1.3515