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Tuesday, March 21, 2023

The super dollar is up almost 2% so far this month: the pound sterling surprises

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He euro it yielded 0.34%, to u$s1.0684, pressured by the deterioration of manufacturing activity in the area of ​​that currency, although the rebound in the services sector, more sensitive to inflation, contained the losses.

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The notable exception was the pound, which rose 0.56% to $1.2106, extending its two-day advance against the greenback.

The pound sterling, a surprise

And it is that The dollar was lower on Tuesday against the pound sterlingbut rose slightly against other currencies, after the release of several encouraging economic data from US activity, which suggested that the Federal Reserve (FED) will keep interest rates higher for longer.

Business activity in the United States picked up unexpectedly in February, reaching its highest level in eight months, according to a survey published in the day, rising to 50.2 from 46.8 in January.

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The report followed recent strong data on retail sales, the labor market and manufacturing production suggesting solid momentum for the economy earlier in the year.

“It is increasingly clear that the United States is not in any kind of recession There are no signs of a recession at the moment,” said Adam Button, chief currency analyst at ForexLive in Toronto.

“The market has largely reconsidered the possibility of a 2023 recession. The US economy has endured higher rates so far and the chances are increasing that the Fed will have to raise rates to 6% by the end of the year,” added.

The dichotomy between leading indicators of the US economy, which show a recession still looming, and others which point to still strong demand, will likely keep the Federal Reserve cautious, according to Erik Nelson, macroeconomic strategist at Wells Fargo Securities in London. .

For his part, in front of and inhe dollar It was up 0.23% to 134.6 yen, while against the Australian dollar it was up 0.4% to $0.68875, even after Reserve Bank of Australia minutes showed policymakers they did not consider the possibility of pausing the increases at the February meeting.

The sterling, on the other hand, turned around and rose 0.3% against the dollar to $1.2071 and 0.5% against the euro to 88.36 pence, after data showed British business activity was much stronger. healthy than expected in early February.

Source: Ambito

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