He global dollar rose driven by the improvement in business activity in USA, after a slight drop in the first hours while investors finished assimilating the slowdown in their bets after the Federal Reserve (Fed) put on the table of possibilities only a cut in reference interest rates for the remainder of the year.
He dollar improved 0.12% after having registered its maximum daily percentage increase of the month on Wednesday. In this way, the dollar index —which compares the performance of the greenback with a basket of six other currencies of international relevance— reached 105.6 units.
Yesterday, the publication of the Fed minutes regarding the last meeting of the Federal Open Market Committee (FOMC) They showed insistence on achieving 2% inflation in the medium term even though this could take longer than expected to happen. So the possibility of rate cuts has diminished considerably to, hopefully, a low for the year; while some authorities even expressed themselves in favor of re-implementing some go up
The dollar rose against the euro on Thursday after data showed that U.S. business activity accelerated in May to its highest level in just over two years, suggesting economic growth picked up in the middle of the second quarter.
The dollar, boosted by the improvement in business data
S&P Global said on Thursday that its preliminary production US Composite PMI, which tracks the manufacturing and services sectors, jumped to 54.4 this month. That was the highest level since April 2022 and followed a final reading of 51.3 in April. Meanwhile, a reading above 50 indicates expansion in activity.
“The currency movements show that the market continues to respond to the strong US economic data in the expected manner,” he said. Marc Chandler Chief Market Strategist at Bannockburn Global Forex LLC.
After this data, the euro fell 0.2%, to 1.0805 dollars, after having been quoted at 1.0861 dollars after the preliminary composite purchasing managers’ index of the monetary bloc exceeded for the third consecutive month the level of 50, which separates growth from the contraction.
Meanwhile, the pound sterling fell 0.2% to $1.2689. British Prime Minister Rishi Sunak called national elections on Wednesday, which his Conservatives would lose to the Labor opposition after 14 years in power. Finally, the dollar rose 0.1% to 157.09 yen.
Source: Ambito
