The euro give up a 0.5%, to $0.9828after the publication of the minutes of the meeting of the European Central Bank last month, which showed the authorities’ concern about the possibility of inflation stagnating at exceptionally high levels.
The British pound falls 1.2% against the dollar and touches 1.1185due to concerns about British debt, after the rating agency Fitch lowered the perspective of the United Kingdom note from “stable” to “negative”.
Currency markets have struggled to find a clear direction this week after a dramatic third quarter. The dollar initially fell against most currencies, before regaining ground. The expectation that the main central banks would dilute their policy of high rates was reversed by the Bank of New Zealand’s decision this week to insist on a steep hike.
“Confidence was very negative at the end of the third quarter and could only go up, so it improved at the beginning of the fourth quarter, triggered by the intervention of the Bank of England (in the British government bond markets),” he said. stephen roosterfrom BMO Capital Markets in dialogue with Reuters.
“That’s where we are right now. We don’t really have good fundamental reasons to aggressively buy pounds, euros or yen, but we all know the dollar is expensive and maybe the Fed is wrong and will have to pivot.”
Attention now turns to US inflation data due next week to define the caliber of the rate hike. Jobs data released Thursday showed jobless insurance claims rose more than expected last week. Initial claims for state jobless benefits increased by 29,000, to 219,000 seasonally adjusted for the week ending Oct. 1, the Labor Department said Thursday.
The labor market has been largely resilient, although some cracks are emerging as the Federal Reserve steps up its campaign to tighten monetary policy. The US central bank raised its policy rate from near zero at the start of the year to the current range of 3% to 3.25%, signaling last month that bigger hikes were in the offing this year.
The managing director of the IMF, Kristalina Georgievwarned this Thursday about the possibility of a greater risk of recession and pointed out that the world’s largest economies – Europe, China and the United States – are slowing down, which slows down the demand for exports from emerging and developing countries, highly affected by high food and energy prices.
Source: Ambito
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