On Friday, the US Dollar Index (DXY) measured against a basket of six major currencies on an average, had clung on to previous session’s gains ahead of the US Fed’s January 31-February 1 policy meet, however, much of the session’s gains were pared amid an uncertain economic outlook.
In the matter of the fact, in the day’s marginal rise in US Dollar Index came forth a day after the US Commerce Department had unfurled that the US GDP (Gross Domestic Product) grew by 2.9 per cent over Q4, 2022, though, on the flipside of the coin, nearly a half of the growth had been yielded from an increase in inventories as consumer spending slowed sharply in the face of a stabbing inflation-surge.
Apart from that, Government data also had unveiled later this week that the US consumer spending that accounted for nearly a 66 per cent of entire economic activity in the United States, had telescoped by 0.2 per cent in December, eventually stoking frets of an economic meltdown while paring the greenback’s earlier gains.
Dollar rises marginally ahead of US Fed policy meet
Citing statistics, In the day’s FX market wind-down, the US Dollar Index (DXY) measured against a bucket of six major currencies on an average edged 0.19 per cent higher to 101.51, while the bloc’s common currency Euro fell by 0.17 per cent to $1.0872 against its American counterpart.
Nonetheless, over the week, Euro rose by 0.2 per cent following a weakening of the greenback. Besides, the greenback lost 0.25 per cent against the Japanese Yen to 129.89 yen per Dollar, while British Pound dipped 0.12 per cent to $1.2397.
On top of that, safe-haven Swiss Franc shed 0.11 per cent to $0.9210 against its American peer, while commodity-linked Canadian Dollar shrugged off 0.14 per cent to $1.3311. Meanwhile, citing that the market participants remained utterly cautious following release of a cascade of dismal economic data over recent past including a decline in consumer demands, which might just derail the US Fed from an aggressive rate-hike path at its January 31-February 1 policy meet, a head of FX Analysis at Monex Europe, Simon Harvey said, “The latest inflation data has allowed Fed officials to guide markets to a slower pace, and given their preference on the duration of restrictive monetary policy, we expect a moderation in price pressures to result in the Fed taking rates to a terminal level of 5% by March”