Wed, May 22, 2024

The Dollar Remains Stable

Dollar

Following two days of gains, the dollar fluctuated on Friday. It showed little change in morning trading in London as investors considered the outlook for interest rates in the wake of stronger-than-anticipated U.S. economic data on Thursday.

The euro was slightly up compared to the dollar, rising by 0.1% to $1.061 after falling by less than 0.1% on Thursday.

The yen was down 0.23% at 132.622 to the dollar simultaneously. Nevertheless, after the Bank of Japan (BOJ) modified a crucial bond market policy earlier this week, the Japanese yen was on track to advance by about 3% weekly.

The U.S. Federal Reserve has aggressively raised interest rates to combat inflation, luring investors back to the nation’s fixed-income assets and driving the dollar up by almost 9%.

The Dollar Index

The dollar index has dropped more than 8.21% since hitting a 20-year high in September, with a sharp slowdown in U.S. inflation. According to a second report, the third-quarter recovery of the American economy was faster than anticipated.

The dollar index, which compares the dollar value to its main competitors, was down less than 0.1% at 104.31 on Friday.

To $1.207, the sterling increased by 0.29%. Kiwi increased by 0.51% to $0.628, while Aussie increased by 0.41% to $0.67.

In November, according to data, Japan’s core consumer inflation reached a 40-year high of 3.7% as businesses continued to pass on rising costs to consumers. The yen was the focus of the market’s attention at the time. Tuesday saw the biggest daily increase in the value of the Japanese yen since 1998 due to a key policy change by the BOJ that made Japanese assets appear more appealing.

The central bank will now allow the ten-year bond yield to move 50 basis points on either side of its 0% target, as opposed to the previous 25 basis point band.

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