The dollar fell this Tuesday, April 18, against most of the main currencies after learning about growth better than expected Chinawhile strong UK wage figures supported sterling.
The euro rose 0.4% to $1.0966 after two consecutive daily falls of more than 0.5%. The dollar index lost 0.362% after having advanced more than 1% in the last two sessions. The yuan rose 0.02% to $6.8824.
Chinese Gross Domestic Product (GDP) grew by 4.5% year-on-year in the first three months of the yearexceeding the forecasts of analysts, who pointed to an expansion of 4%, thanks to the fact that the end of the restrictions due to the Covid-19 boosted the second world economy.
Other data on March activity in China also showed retail sales growth accelerating to 10.6%.beating expectations and hitting a nearly two-year high, while industrial production also picked up, albeit somewhat below expectations.
“The prospect of the dollar weakening a bit against major currencies depends on the strength of China”said Thierry Wizman, of Macquarie in New York. “When the rest of the world does well or better than the United States in terms of activity (…) that is usually bad for the dollar.”
Another factor weakening the dollar is the likelihood of disinflation in the United States at this time, a reason for the Federal Reserve to pause raising interest rates, Wizman said.
“There is a very good chance that the euro and sterling will continue to do well,” he said. “It starts with the disinflation story in the United States, which is something people aren’t really getting into.”
The pound rose 0.43% to $1.2427 despite an unexpected rise in the unemployment rate in the three months to Februaryas wage growth remained above forecasts, which could lead the Bank of England to raise rates again in May.
Source: Ambito
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