He global dollar fell in the early hours of Friday although it remained near its two-year high and on track to close its third week of gains, as markets digested a series of measures from global central banks and the imminent risk of a US government shutdown. .
He dollar index —which measures the performance of the greenback in relation to a basket of six other internationally relevant currencies— fell 0.3% and reached 108.01 units after having hit a two-year high of 108.54 points. In the background, a government shutdown loomed USA, after a spending bill backed by the president-elect donald trump will fail in House of Representatives on Thursday.
The government funding will expire at midnight on Friday, and if lawmakers fail to extend that deadline, the U.S. government will begin a partial closure that it would cut off funding for everything from border surveillance to national parks; and would cut the salaries of more than 2 million federal employees.
This would directly reduce the growth of Gross Domestic Product (GDP) by about 0.15% for each week it lasts, Goldman Sachs noted, but growth would increase by the same amount once the shutdown is resolved.
He euro also hit a one-month low of $1.03435 on Friday, after Trump said the European Union (EU) It must buy American oil and gas to make up for its “tremendous deficit” with the world’s largest economy, or face tariffs. The single currency quickly pared its losses against the dollar and rose 0.32% to $1.039. “It’s clear that the markets are not too worried about that yet,” he told Reuters. Michael Brown, strategist Pepperstone. “I think it’s just an opening salvo in what we all know is going to be a kind of second trade war between USA and Europe”, he added.
The gains of the dollar
The dollar was set to end the week with a 1% gain against a basket of currencies, supported by expectations that US rates will stay high for longer. Markets are now pricing in less than 40 basis points of U.S. rate cuts. Federal Reserve (Fed) by 2025.
Attention now turns to the release of price data for the basic PCE, the Fed’s preferred measure of inflation later on Friday for more clues about the outlook for the U.S. economy.
The dollar continues to rise in Uruguay
In Uruguay, meanwhile, the dollar rose 0.31% this Thursday and closed at 44.72 pesos in the interbank price ofl Central Bank (BCU), marking a new high so far this year.
So far in December, the US currency has accumulated an appreciation of 3.64%, which at an annual level is 14.62%.
Source: Ambito
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