The US dollar changed a little in European morning trade on Thursday. Markets are eagerly awaiting US GDP data before taking new positions.
The dollar index was steady at 101.39. Individual crosses were there same. The euro rose by less than 0.16% to $1.0964, and the pound by less than 0.1% to $1.2406.
The fourth quarter of last year should have seen a decline in the US economy as a result of falling consumer spending and high inflation.
However, easing supply chain bottlenecks and a drop in energy prices near the end of the year should provide some support, as is a labor market that has remarkably failed to deteriorate significantly.
Analysts predict annual growth will slow to 2.6% from 3.24% in the third quarter.
Rate Hikes Around the Globe
Following Wednesday’s 25 basis point increase, the Bank of Canada announced that it would ‘pause’ interest rate hikes, fueling speculation that the US Federal Reserve will soon follow suit, putting pressure on the dollar.
After its meeting later Thursday, the South African Reserve Bank will take a similar pause before raising its prime rate by 50 basis points to 7.55%.
On the other hand, a “bullish cocktail for the rand” will be created by the weaker dollar environment and China’s economic opening, according to the report, which also notes that both factors will increase demand for South Africa’s commodity exports. The rand was steady at 17.099 per dollar after trading sideways since late November.
In other news, “quiet periods” ahead of central bank meetings in the United States, the eurozone, and the United Kingdom next week ensure no comments from central bank officials to trade-off. Markets are currently pricing another 100 basis points of ECB tightening at its next two meetings.
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