The dollar index, which last week experienced its biggest weekly drop in almost four months, registered an increase of 0.2%, standing at 105.73 units.
This Wednesday, the dollar continues its rebound for the third consecutive day, driven by the statements of some Federal Reserve authorities which leave open the possibility of future increases in interest rates. This increase occurs just before the president’s speech Jerome Powellin which it is expected to give clues about the central bank’s future policy.
The greenback, which this week reaches its lowest point in seven weeks after the Fed’s decision to keep its rate stable official interest rate and data suggesting a slowdown in the US labor market, seems to find a support level. Markets continue to debate whether interest rates have peaked and when monetary conditions might begin to ease.
The index of dollar, which last week experienced its largest weekly drop in almost four months, registered an increase of 0.2%, standing at 105.73 units.
ING’s Francesco Pesole comments: “The data side is very quiet, so the main drivers are strong comments from Fed spokespersons.” Several Fed policymakers maintained a balanced tone Tuesday, stressing that they are assessing strong economic data, some signs of a slowdown and the impact of rising long-term bond yields, while considering whether raising rates is necessary to combat the inflation. Now, attention turns to Powell’s remarks on Wednesday.
Dollar against other currencies
As for other currencies, the euro fell 0.2% to $1.0674, due to concerns about worsening growth prospects in the euro zone. Data released on Tuesday reveals that German industrial production falls more than expected in September.
The pound sterling, which earlier in the week hit a seven-week high against the US dollarfell 0.2%, standing at 1.2264 dollars.
For its part, the yen continues to weakenagain approaching 150 units per dollar, which keeps investors attentive to the possibility of monetary intervention.
Source: Ambito
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