Powell to determine further movement of dollar
2023.01.10 04:11
Powell to determine further movement of dollar
By Kristina Sobol
Budrigannews.com – In early European trade on Tuesday, traders looked to a speech from Fed Chair Jerome Powell for more clarity regarding the central bank’s rate hike cycle. Despite trading just above a seven-month low, the U.S. dollar edged higher.
After falling to a seven-month low of 102.93 in the previous session, the, which tracks the dollar against a basket of six other currencies, rose 0.2% to 102.960 at 03:15 ET (08:15 GMT).
After Friday’s data showed the first contraction in industry activity in more than two years and a slowdown in wage growth, the dollar has been under pressure.
This has raised expectations that when it meets again in early February, the will moderate its aggressive monetary tightening policy.
Mary Daly, president of the Federal Reserve Bank of San Francisco, stated on Monday that the central bank could either slow down to a quarter-point hike or raise rates by 50 basis points for the second time in a row.
Daly stated, “Doing it in more gradual steps does give you the ability to respond to incoming information,” and she added that she anticipates that the central bank will first raise interest rates to somewhere above 5% before resuming normal operations.
is scheduled to speak later Tuesday at a bank symposium in Sweden. Prior to the release of data on Thursday, he may provide additional clarity regarding the rate of rate increases.
Elsewhere, gained 0.1% to 1.0741, close to the seven-month high of 1.0760 from the previous session, helped by a 2.0% month-over-month increase in November.
This was higher than the expected growth of 0.8 percent and a significant improvement from the revised decrease of 2.5 percent the month before, raising hopes that the Eurozone’s slowdown in 2023 may be less severe than initially anticipated.
after reaching a three-week high of 1.2209 on Monday, the price fell 0.1 percent to 1.2170. According to data from the British Retail Consortium and KPMG, there was also encouraging economic news in the United Kingdom overnight. The economy expanded by 6.5 percent in comparison to the previous year.
The yen fell by 0.1% to 132.00, despite data showing that it grew more than expected in December, increasing pressure on the Federal Reserve to tighten monetary policy in the near future.
More FX is waiting for Powell’s speech
after China relaxed most anti-COVID measures and reopened its international borders, the Chinese yuan rose 0.1% to 6.7811, close to a four-month high. It also increased 0.1% to 0.6902.
