Home Business Dollar loses ground after economic data boosts risk appetite

Dollar loses ground after economic data boosts risk appetite

10 min read
Comments Off on Dollar loses ground after economic data boosts risk appetite
0
21

[ad_1]

Article content

NEW YORK/LONDON —

The U.S. dollar lost ground to other currencies including

Article content

the euro, the yen and sterling after U.S. economic data provided

further evidence that inflation was starting to ease, improving

investor appetite for riskier assets and reducing demand for

the safe-haven greenback.

The U.S. producer price index (PPI) increased 8.0% for

the 12 months through

October

compared with

economist expectations

for 8.3% and September’s 8.4% increase, according to the

Labor Department data.

Advertisement 2

Article content

The report, following last week’s smaller-than-expected

increase in consumer prices for October, encouraged investors

who have been closely monitoring inflation data for signs that

the Federal Reserve could slow its interest rate hikes, which

are aimed at dampening soaring prices.

“Risk appetite has improved. That tends to weaken the

dollar,” said Karl Schamotta, chief market strategist

at payments company, Corpay.

“Fed officials will need to see many months of this

before they pause the rate hike cycle but overall price

pressures appear to be going in the right direction.”

Schamotta says the dollar likely peaked in September but

he also see a risk for a short-term “sell-off in risk-sensitive

currencies and a rally in the dollar if there is a U.S.

Advertisement 3

Article content

government funding squeeze before year end.”

Before the U.S. data the euro, sterling and the Swedish

crown had already risen sharply against the U.S. dollar as

traders assessed a slew of economic data, including UK and euro

zone job figures plus German economic sentiment.

The euro was last up 0.79% at $1.0407 after

earlier touching its highest since July 1. In Europe traders

were also eying encouraging data such as German economic

sentiment ZEW index, which rose in November.

“Due to concerns about a deep recession over the winter the

index had completely collapsed recently. In view of the mild

start to the winter heating period and the well-filled gas

stores analysts are likely to have got their hopes up that

things might not turn out to be quite so bad,” said Antje

Advertisement 4

Article content

Praefcke, FX Analyst at Commerzbank.

Data also showed employment in the single currency area rose

in the third quarter.

Jane Foley, head of FX strategy at Rabobank in London also

pointed to other headlines supporting risk currencies against

the dollar. She saw U.S. President Joe Biden’s summit meeting

with Chinese leader Xi Jinping as an indication that tensions

between the two countries may have cooled, and also mentioned

Russia’s withdrawal from Kherson in Ukraine.

The dollar index, which measures the currency

against six counterparts including sterling and euro, was last

down 0.46% at 106.162 after earlier touching 105.34, its lowest

point since August.

The greenback was last down 0.68% against Japan’s yen

Advertisement 5

Article content

at 138.975.

The Swedish crown rose sharply against the U.S.

dollar after data showed inflation in Sweden rose less than

expected in October. The dollar was last down 0.19% at 10.3831

crowns.

Sterling was up 1.56% at $1.1941 after earlier

rising as much as 2.27%, which put it at a three-month high

against the dollar.

This was ahead of a tough UK government budget plan due out

later this week and after data showing Britain’s unemployment

rate unexpectedly rose and vacancies fell for a fifth report in

a row as employers worried about the economy.

========================================================

Currency bid prices at 10:05AM (1505 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Advertisement 6

Article content

Previous Change

Session

Euro/Dollar $1.0407 $1.0325 +0.79% -8.46% +$1.0481 +$1.0312

Dollar/Yen 138.9750 139.9250 -0.68% +20.73% +140.6000 +137.6650

Euro/Yen 144.63 144.44 +0.13% +10.98% +145.3600 +144.2300

Dollar/Swiss 0.9434 0.9431 +0.07% +3.47% +0.9453 +0.9357

Sterling/Dollar $1.1942 $1.1760 +1.56% -11.69% +$1.2028 +$1.1745

Dollar/Canadian 1.3305 1.3316 -0.05% +5.26% +1.3335 +1.3226

Aussie/Dollar $0.6732 $0.6702 +0.43% -7.40% +$0.6797 +$0.6686

Euro/Swiss 0.9817 0.9738 +0.81% -5.32% +0.9840 +0.9727

Euro/Sterling 0.8712 0.8783 -0.81% +3.71% +0.8805 +0.8712

NZ $0.6145 $0.6097 +0.77% -10.24% +$0.6203 +$0.6087

Dollar/Dollar

Dollar/Norway 9.9365 10.0310 -0.99% +12.74% +10.0485 +9.8930

Euro/Norway 10.3434 10.3629 -0.19% +3.30% +10.3967 +10.3207

Dollar/Sweden 10.3831 10.4750 -0.19% +15.14% +10.5043 +10.3049

Euro/Sweden 10.8020 10.8221 -0.19% +5.55% +10.8423 +10.7840

(Reporting by Sinéad Carew in New York and Joice Alves in

London; Editing by Andrew Cawthorne, Angus MacSwan and Andrea

Ricci)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

[ad_2]

Source link

Load More Related Articles
Load More By 
Load More In Business
Comments are closed.

Check Also

China’s Jan factory activity contracts at slower pace – Caixin PMI

[ad_1] Breadcrumb Trail Links PMN Business Article content BEIJING — China’s factory activ…