The dollar is experiencing a fall, reaching its lowest level in almost eight weeks against the euro. This drop is due to growing confidence that the Federal Reserve concluded its cycle of interest rate increases. Investors are watching comments from several government officials. us central bank looking for signals about future monetary policy.
One of the focuses of attention is on the president of the Fed, Jerome Powell, who is speaking these days. Market observers are interested in yes powell maintains the more moderate tone it adopted after the meeting two central bank days last week. In addition, comments from other Fed authorities are being evaluated looking for clues on whether they anticipate further rate increases.
Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Torontosuggests that despite the unanimity in last week’s statement, it is Opinions within the Fed may differ, which could lead to a divergence between “doves” and “hawks” at the Federal Open Market Committee (FOMC).
The recent data release, showing weaker-than-expected employment growth in October, strengthens the idea of a slowdown in the US economy, which supports the expectation that the Fed will keep interest rates at stable levels.
Dollar: the data observed by the market
The next event that is likely to influence the markets is the release of consumer price inflation data for October next week.
Regarding the figures, the dollar index is decreasing by 0.03% to 105.02 units, reaching its lowest level since September 20, which was 104.84. Over the past week, the index saw its biggest weekly decline since July, falling 1.4%.
In the case of the euro, it is gaining 0.09%, trading at $1.0739, after reaching a high of $1.0756, its highest level since September 13. However, economic weakness in the euro zone compared to the United States could limit further appreciation of the single currency.
On the other hand, the dollar is rising 0.25% against the yen, reaching 149.74 yen. Last week, the yen had reached 151.74 per dollar, approaching October 2022 lows, prompting the Bank of Japan to intervene on several occasions to sell dollars.
Source: Ambito
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