The US Dollar Fell Slightly

The US dollar fell in early European trade Friday, remaining near seven-month lows amid concerns about a slowing US economy, while the sterling fell after weak retail sales data.

The Dollar Index fell 0.1% to 101.750, just above the seven-month low of 101.51 set on Wednesday.

Investors anticipate the Federal Reserve to slow interest rate increases as signs of inflation peak, which is why the index is down 1.3 percent this year after experiencing significant losses in the fourth quarter of 2022.

However, the world’s largest economy appeared to be slowing this week, according to data from the United States, which showed that manufacturing production fell 13%, industrial production dropped 0%, and retail sales fell 11% month over month in December.

GBP/USD fell 0.1% to 1.2372 after UK retail sales unexpectedly fell by 1,34% in December, much lower than predicted by the 0.5% monthly rise.

After European Central Bank President Christine Lagarde warned on Thursday at the World Economic Forum Switzerland that inflation figures remained “way too high,” reiterating the need for aggressive monetary policy decisions, EUR/USD increased 0.2 percent to 1.0850, trading near levels not seen since early April 2022.

Asia and Oceania

After Japan’s core consumer prices increased 4.0% in December over the prior year, exceeding the central bank’s target of 2.4%, the USD/JPY increased by 0.3% to 128.81.

The yen has been volatile recently due to expectations that the BOJ will end its ultra-easy monetary policy soon.

The AUD/USD rose 0.5% to 0.6935, the NZD/USD rose 0.6% to 0.6429, and the USD/CNY fell 0.1% to 6.7705, with the yuan set to fall 1.3% this week as rising COVID-19 cases in China cast doubt on the country’s near-term economic prospects.

On Friday, the People’s Bank of China maintained its benchmark loan prime rate at historic lows for the fifth month.

The Nikkei 225 index in Japan reversed early losses and ended higher on Friday, with sentiment buoyed by higher U.S. futures after Wall Street losses overnight and a weaker yen.