Sat, January 28, 2023

The Pound Rose Moderately while the U.S. Dollar Dropped

The Pound Rose Moderately while the U.S. Dollar Dropped

The GBP increased by 0.1% to 1.2894 versus the U.S. dollar after the U.K. retail sales data showed a 0.9% increase in the last month. However, according to the Bank of America, the U.K. government is unlikely to unveil a big increase in fiscal spending in the March 11 budget, so they don’t expect a meaningful fiscal impulse near term.

Meanwhile, the Japanese yen strengthened due to the safe-haven demand. It rose by 0.1% to 111.96 against the U.S. dollar. However, Asian currencies traded mostly low on Friday. The Australian dollar and the New Zealand dollar both declined by 0.2% against the U.S. dollar.

The U.S. dollar index lowered by 0.1% to 99.727 on Friday. Before that, the dollar rallied due to its safe-haven status, as well as recent data, which showed that the U.S. economy stays strong.

What Caused the Dollar to Fall?

The currency fell after the experts remarked recently about the coronavirus danger. World health officials warned that the virus could break out globally at any time. That statement caused the investors to worry.

While the number of cases in the rest of the world is very small compared to China, that may not stay the same for long – noted Tedros Adhanom Ghebreyesus, World Health Organization Director-General. He added that they need to quell the outbreak in any country while the window of opportunity is still open, because it may close shortly.

Meanwhile, the investors are waiting for new data. Markit’s preliminary purchasing managers’ index (PMI) is due soon. It may show a decline to 51.5, with the services PMI dropping down to 53.

The National Association of Realtors is planning to report on January sales of existing residential buildings later on Friday. Experts speculate that existing home sales will show a 1.8% downfall to an annual rate of 5.43 million last month.

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