Dollar is losing popularity
2023.01.20 09:54
Dollar is losing popularity
By Kristina Sobol
Budrigannews.com – Concerns about a slowdown in the U.S. economy led to a slight decline in the U.S. dollar in early European trade on Friday, which remained close to seven-month lows. On the other hand, weak retail sales data pushed sterling lower.
The, which compares the dollar to a basket of six other currencies, was 0.1% lower at 101.750 at 03:15 ET (08:15 GMT), just above the 101.51 low it reached on Wednesday, which was a seven-month low.
Investors bet that the will slow the pace of its interest rate rises in light of signs that inflation has peaked, which is why the index is down 1.3% this year after suffering significant losses in the fourth quarter of 2022.
At the same time, this week’s U.S. data indicate that the world’s largest economy is slowing down, with 0.7% and 1.3% declines, respectively, compared to December.
In a note, analysts at ING stated, “This is the third consecutive month of contraction in industrial activity with output declines looking broad-based.” Fears that the United States may already be in a recession are heightened by the steep decline in industrial production, which follows retail sales weakness, as well as news of additional job cuts.
Elsewhere, it dropped 0.1% to 1.2372 after the UK unexpectedly fell in December, falling by 1%, which was much weaker than the 0.5% monthly rise that was predicted.
According to Heather Bovill, deputy director for surveys and economic indicators at the Office of National Statistics, “Retail sales dropped again in December with feedback suggesting consumers cut back on their Christmas shopping due to affordability concerns.”
After the president of the European Central Bank stated at the World Economic Forum in Davos, Switzerland, on Thursday, that inflation figures remained “way too high,” reiterating the need for aggressive monetary policy decisions, the euro rose 0.2% to 1.0850, trading around levels not seen since early April 2022.
Increased by 0.3 percent to 128.81, surpassing the 2% target set by the central bank after Japan’s index increased by 4.0 percent in December from the previous year.
Due to expectations that the will soon end its ultra-easy monetary policy, yen trading has been volatile recently.
The yuan is expected to lose 1.3% this week as rising COVID-19 cases in China cast doubt on its near-term economic prospects. The yuan rose 0.5 percent to 0.6945, rose 0.6 percent to 0.6439, and fell 0.1 percent to 6.7705.
