U.S. dollar fell on Thursday. How is the Euro faring?
The U.S. dollar struggled on Thursday as the Fed released its last meeting’s minutes. The latter hinted that the agency might continue hiking interest rates less aggressively. Niels Christensen, the chief analyst at Nordea, stated that the Fed would be happy to increase rates by 50 basis points in December and only by 25 basis points from the first meeting in 2023. However, Christensen also added that the central bank will still try to do more to hinder inflation. If the labor market remains strong, though, it won’t push higher rates.
The dollar index declined by 0.1% at 105.82 against the basket of six major currencies on Thursday after shaving off 1.1% on Wednesday. Meanwhile, the euro traded in the green after the European Central Bank released the account of its October meeting. According to this report, the policymakers feared inflation might continue rising, justifying their outlook for further interest rate hikes.
The common currency added 0.1% at $1.0408 at last. At the same time, the British Pound exchanged hands at $1.21225, soaring by 0.6% on Thursday. The sterling surged forward by 1.4% in the previous session. Preliminary British economic activity data beat analysts’ expectations, supporting the currency.
The euro changed insignificantly versus the Swedish krone today. Sweden’s Riksbank also increased rates by 75 basis points recently, but economists expected such a rise.
Meanwhile, China is still battling with soaring Covid-19 cases. The government imposed more restrictions nationwide, bolstering investor concerns about the economic recession. The country reported a record number of virus cases on Thursday.
Despite that, the yuan strengthened after the authorities stated that Beijing would use timely cuts in banks’ reserve requirement ratio, along with other monetary policy tools, to maintain high liquidity.
What about the Japanese Yen and EM currencies?
The Japanese yen rallied on Thursday, skyrocketing against the greenback by 1% to 138.10. The Australian dollar also gained 0.2%, exchanging hands at $0.6747. Meanwhile, the New Zealand dollar traded higher by 0.3% at $0.6264.
On the other hand, the Hong Kong dollar traded lower on the day, even though it recovered slightly after recent lows. The currency stood at 7.8082 per dollar at last.
On Thursday, the Malaysian ringgit surged forward by 1.8% versus the dollar, while stocks added 4%. Turkey’s lira changed insignificantly over this session, though. Analysts expect its central bank to cut rates by another 150 basis points to 9%.
South Africa’s rand jumped by 0.6%, hitting three-month highs. On Wednesday, new data showed an unexpected surge in inflation.