Is the super dollar back?: the currency approaches 6-month highs

Is the super dollar back?: the currency approaches 6-month highs

The dollar American shows weakness this Wednesday, although it is still near the highs which has been achieved in the last six monthsDue to the growing concern about to world economic growthwhich is driving the search for safe haven.

The index of the dollar, which tracks the currency’s performance against a basket of six other major currencies, falls 0.1% to 104.612, staying very close to a six-month high of 104.90.

the worry on global economic growth has led investors to take refuge in the dollar, despite the fact that this currency has experienced some weakness in the last sessions.

Dollar: Europe reinforces the negative outlook

This negative trend continues during the session, since the industrial sector in Germany suffered a fall of 11.7% in July, a result considerably worse than expectedor, that was a 4.0% decrease.

The weakening in economic data is not limited to Germany, as manufacturing reports from the United Kingdom and, in general, from the euro area, experienced declines on Tuesday, and service sectors are also showing signs of contraction.



In the foreign exchange market, the EUR/USD pair registers an increase of 0.2%, standing at 1.0737, after having reached a three-month low of 1.0705. GBP/USD it also shows an increase of 0.2%, reaching 1.2582, after hitting three-month lows the day before.

Data is expected for today eurozone retail salesand a decrease of 0.1% per month and 1.2% per year is forecast, due to the persistent pressure on consumers in the region due to high inflation.

Inflation and the dollar: more interest rates?

He European Central Bank It will meet next week, and weak data from the eurozone has raised the odds that bank officials will opt for a pause in raising interest rates, which could hit the single currency further.

In the United States, the Federal Reserve is expected to keep interest rates unchanged later this month, and Federal Reserve Governor Christopher Waller indicated on Tuesday that recent economic data offers room for the central bank to make a decision.

dollar vs yen

He japanese yenMeanwhile, it remains close to 10-month lows, with USD/JPY down 0.3% to 147.27, recovering slightly after hitting lows.

The Japanese authorities have reiterated their warnings to the markets regarding bets against the yen, and masato kanda, the main person in charge, stressed that the Government will not rule out any measure if speculation against the Japanese currency persists. The market expects a possible intervention similar to last year when the pair approaches the 150 level.

Also, the pair USD/CNY shows an increase of 0.1%, reaching 7.3087, surpassing the 7.3 mark and reaching its lowest level against the dollar since November 2022. Investors remain concerned about the slowdown of the economic recovery in the second World economy.

Lastly, the pair AUD/USD rregisters an increase of 0.1%, reaching 0.6384. This rise is partly due to data showing slightly better-than-expected growth in the Australian economy in the second quarter, easing concerns about a possible recession.

Source: Ambito

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