Forex market cannot decide on direction
2022.12.16 03:50
Forex market cannot decide on direction
Budrigannews.com – As traders consider the implications of monetary tightening at a number of senior central banks, the U.S. dollar retreated in early European trade on Friday, reversing some of the strong gains from the previous session.
The, which tracks the dollar against a basket of six other currencies, fell 0.1% to 104.123 at 03:25 ET (08:25 GMT) following its biggest overnight rise since late September.
On Thursday, a number of European central banks increased interest rates by 50 basis points, including the, the, and the.
In addition, the central banks indicated that additional interest rate hikes were anticipated given that inflation remained extremely high.
In particular, the President of the ECB stated that, based on the available data, she anticipated another 50 basis point rise at the ECB’s February 2 meeting “and possibly at the one after that, and possibly thereafter.”
The safe-haven dollar gained traction as a result of concerns that the global economy would enter a recession in the coming year. This suggests that economic hardship will continue into 2023.
Traders are awaiting the release of activity data later in the session, so although moves have been limited, this “risk-off” mood has somewhat subsided during Friday’s session.
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rose 0.1% to 1.0631, bouncing back somewhat subsequent to dropping 0.5% on Thursday.
Following the meeting of the European Central Bank, the investment bank JPMorgan raised its forecast for how high interest rates in the Eurozone will rise on Thursday to 3.25 percent from 2.50 percent.
dropped 0.2 percent to 1.2164, its biggest drop since Nov. 3 after falling 2 percent the day before.
The most recent data from the United Kingdom showed that sales fell for the third time in four months in November, down 0.4% from October and 5.9% for the year. This set back Sterling’s recovery.
fell 0.5 percent to 137.09, helped along by data showing that overall business activity in the country managed to grow in December, despite a significant slowdown in despite strength in the sector.
Traders were torn between optimism regarding an eventual economic reopening in the country and concern regarding an unprecedented spike in COVID-19 cases when the risk-sensitive fell 0.1% to 0.6694, stabilizing after slumping 2.4% overnight, its biggest one-day drop since March 2020. It also edged lower to 6.9709, with traders torn between optimism and concern.
