Dollar Dips as China's NPC Looms

8 Nov 2024 , 10:46 AM

As markets considered the effects of Donald Trump’s imminent return to the White House and what it might imply for the U.S. economy and its rate outlook, the dollar took a break on Friday, but it was still on course to close a crazy week with a modest gain.

As a result, sterling was able to return to the $1.30 level, while the yen also had some relief, lingering around the 153 per dollar level.

As anticipated, the Federal Reserve lowered interest rates by 25 basis points on Thursday, but it also signalled a prudent and cautious approach to further easing.

Investors will be keenly monitoring Beijing’s five-day National People’s Congress (NPC) Standing Committee meeting as it comes to an end later today in hopes of learning more about China’s stimulus plans, which might boost the value of the yuan and the Antipodean currency.

As speculators closed out lucrative wagers on a Trump presidency following his election victory, the dollar further undid some of its big gains from earlier in the week.

Due to a resurgent dollar and a political crisis in Germany, where Chancellor Olaf Scholz’s already uncomfortable coalition dissolved late on Wednesday, the euro dropped 0.07% to $1.0795 and was on track to drop 0.35% weekly.

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