Dollar falling due to demand for risky assets

12/23/2022

3 minutes read

2022.12.23 14:40

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U.S. dollar falls as risk appetite improves with data showing slowdown

Dollar falling due to demand for risky assets

Budrigannews.com – On Friday, data indicated that the U.S. economy is cooling a bit, reinforcing expectations of smaller interest rate increases from the Federal Reserve and improving investors’ risk appetite. As a result, the dollar slid against the majority of currencies in choppy, thin trading.

After rising by 0.4% in October, the personal consumption expenditures (PCE) price index increased by 0.1 percent in November. After rising 6.1% in October, the PCE index increased 5.5 percent over the year through November.

The PCE index increased by 0.2 percent in November after rising by 0.3 percent in October. After increasing by 5.0% in October, the so-called core PCE price index increased by 4.7% in November. The PCE price indexes are tracked by the Fed for its monetary policy.

The Dow Jones Industrial Average and the were both up on the day, and commodity currencies like the Australian, New Zealand, and Canadian dollars, which are extremely sensitive to sentiment regarding risk, also gained against the US dollar. Additionally, investors sold safe-haven Treasuries, raising yields.

“Today, stocks are feeling a little more at ease. Amo Sahota, executive director of the San Francisco-based FX consulting firm Klarity FX, stated, “There appears to be no panic.”

“The inflation data are moving in the right direction, albeit not at a sufficient rate, and the U.S. economy’s expansion has not been significantly hampered. It’s developing currently at a continuous speed and there’s no stifling of the economy right now,” he added.

The Federal Reserve is broadly expected to raise financing costs by only 25 premise focuses at its next arrangement meeting, in January, after various enormous increments.

To $1.0616 in afternoon trading, the euro gained 0.2% against the dollar.

The Canadian, Australian, and New Zealand currencies rose against the US dollar. The New Zealand dollar was up 0.6% to US$0.6287, while the unit was up 0.4 percent to US$0.6710. The Canadian dollar lost 0.4% against the greenback, falling to C$1.3599.

The Canadian dollar also benefited from Statistics Canada data showing that the Canadian economy expanded by 0.1 percent in October compared to September and that another 0.1 percent increase in GDP is likely to occur in November.

However, the dollar rose 0.4% to 132.89 yen against the yen. However, following the Bank of Japan’s (BOJ) alteration of a crucial bond market policy earlier this week, the Japanese yen was on track for a weekly decline of 2.7 percent.

A second report released on Friday pointed to a slowdown in business spending on equipment this quarter as higher borrowing costs cool demand for goods. New orders for U.S.-made capital goods increased moderately in November, while shipments decreased.

According to the data, the closely watched proxy for business spending plans, orders for non-defense capital goods excluding aircraft, increased by 0.2 percent last month. These alleged center capital merchandise orders expanded 0.3% in October. However, core capital goods shipments decreased by 0.1% following an increase of 1.4% in October.

A benchmark survey released on Friday revealed that U.S. consumers expect price pressures to decrease significantly in the coming year, with their one-year inflation outlook falling to its lowest level in 18 months. In one of his press briefings, Fed Chair Jerome Powell mentioned this important number.

The dollar has risen nearly 9% as the Federal Reserve has aggressively raised interest rates to control inflation in a year that has been brutal for global markets.

More Malaysia’s annual inflation has reached 4%

However, since reaching a 20-year high in September, the has lost more than 8%. A sharp slowdown in U.S. inflation has raised hopes that the Fed will soon end its tightening cycle.

At 104.35, the index saw little movement in the past.

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Currency bid prices at 1:47PM (1847 GMT)

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

Previous Change

Session

Dollar index 104.3900 104.3700 +0.04% 9.123% +104.5300 +104.1100

Euro/Dollar $1.0608 $1.0600 +0.09% -6.68% +$1.0633 +$1.0587

Dollar/Yen 132.8950 132.3800 +0.40% +15.45% +133.1350 +132.1700

Euro/Yen 140.96 140.22 +0.53% +8.16% +141.2100 +140.0800

Dollar/Swiss 0.9340 0.9312 +0.32% +2.41% +0.9342 +0.9288

Sterling/Dollar $1.2027 $1.2037 -0.05% -11.04% +$1.2089 +$1.2020