Dollar shows who is in charge in market
2023.01.03 09:23
Dollar shows who is in charge in market
Budrigannews.com – The dollar edged up on Monday, pulling away from late half year lows against a crate of significant monetary forms.
The markets bet that a Federal Reserve tightening cycle may be coming to an end, which has resulted in a decline in the US currency.
The first trading day of the year was quiet, and many countries, including major trading centers like Britain and Japan, were closed for the holiday. Sentiment remained fragile.
The, which measures the value of the US dollar against a basket of major currencies, increased by about 0.14 percent to 103.63, up from around 103.38, which was a six-month low.
The euro lost about 3% to $1.0683, but it was still close to its highest level since June. At $1.2051, sterling was down 0.35 percent.
The dollar fell 0.25 percent to 130.76 against the yen, reaching its lowest level since August.
Ulrich Leuchtmann, head of forex research at Commerzbank (ETR:), says, “There is an attempt by the dollar index to pull higher today, but we do see that it is losing a good part of the strength it gained last year.” said.
“The market was not convinced that the Fed will not cut rates later in 2023 after the last Fed meeting.” This year is going to be interesting.”
The Federal Reserve has begun to slow down the pace of its rate hikes, which have increased by a total of 425 basis points since March to contain inflation.
The dollar index gained 8% last year as a result of the Fed’s tightening, making it the highest annual gain since 2015.
Markets are still paying attention to inflation, central banks, and signs of how long and deep a recession might be.
Kristalina Georgieva, managing director of the International Monetary Fund, stated on Sunday that the year 2023 would be challenging for the global economy.
In contrast, factory activity decreased in December at its sharpest rate in nearly three years for the third consecutive month.
A survey released on Monday indicated, however, that a downturn in manufacturing activity in the Euro Area has likely passed its trough as supply chains recover and inflationary pressures ease.
Global S&P (NYSE:) ‘s final manufacturing Purchasing Managers’ Index increased from 47.1 in November to 47.8 in December, matching a preliminary reading but still below the 50 threshold that separates growth from contraction.
Even though the economy of the euro area is on the verge of going into recession, concerns about the availability of gas over the winter have eased, suggesting that a downturn may not be as bad as people had feared a few months ago.
Euro zone compensation are developing speedier than thought and the European National Bank (ECB) should keep this from adding to currently high expansion, ECB boss Christine Lagarde said at the end of the week.
According to Piet Haines Christiansen, the chief analyst at Danske Bank, “the recent strength of the euro is driven by a mix of things including both the hawkish ECB commentary and hopes of a peak in U.S. rates.”
“It is also supported by hopes that the situation with the energy supply is not as bad as feared,”
More Dollar rises ahead of economic data
