New York: Thursday’s dollar is volatile, erasing most of its initial session losses as investors bet that the Federal Reserve Board will begin declining asset purchases next month and attention will be paid to the timing of interest rate hikes. It fell slightly in a good deal.
Greenbacks recovered from early September in the hope that the US central bank would tighten monetary policy faster than previously expected amid economic improvements and a surge in inflation.
But even after the Fed’s September 21-22 policy meeting minutes confirmed that the stimulus taper was likely to begin this year, the dollar on Wednesday reversed the course and data showed price pressure. It has shown that it is still hitting US consumers.
Shawn Osborne, Chief FX Strategist at Scotia Capital, said:
“At this point, I don’t think this is close to a major reversal of the dollar trend. In fact, what we saw today may be a sign of a corrective rebound we saw. I’ve probably done that course for the past day or two. “
Osborne added that the market expects the Fed to begin curtailing asset purchases as early as next month and ending large-scale bond purchase programs fairly quickly.
“It seems to be moving to some extent in the direction of when and how quickly the Fed will raise interest rates, so that’s another potential plus for the dollar,” he said.
At 3:25 pm eastern daylight, the dollar index fell 0.036% to 93.982, up from a low of 93.754 during the first 10 days of the session. On Tuesday, the greenback hit a year-long high of 94.563.
The euro was flat against the dollar at $ 1.15955, down overnight from its nine-day high, while the pound sterling rose 0.15% against the dollar to $ 1.36815.
Vassili Serebriakov, FX and macro strategist at UBS, said the U.S. stock market has recorded a solid rise in bright earnings, as demand for safe greenbacks may have fallen due to regaining risk motivation. rice field.
Data on Thursday showed that the number of Americans submitting new unemployment allowance claims plummeted last week to the lowest level since mid-March 2020.
In another report, the Ministry of Labor said the final demand producer price index rose, but the rise was smaller than Reuters expected, both on a monthly basis and year-over-year.
The Australian dollar, which is considered a fluid substitute for risk appetite, rose 0.47% from its highest level since September 7th at $ 0.7414.
The New Zealand dollar also rose 0.93% to $ 0.7030, a record high in two and a half weeks.
Elsewhere, the cryptocurrency Bitcoin was up 0.13% to $ 57,451. Early in the session, it reached a five-month high of $ 58,550.
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The dollar falls in choppy transactions as risk appetite improves
Source link The dollar falls in choppy transactions as risk appetite improves