Dollar index up by 0.029% today

9 Feb 2023 , 01:26 AM

The U.S. dollar remained relatively unchanged on Thursday as traders anticipate next week’s U.S. inflation data and took in the  statements from numerous Federal Reserve officials, who predicted gradual interest rate increases.

John Williams, president of the New York Fed, stated at a Wall Street Journal event that increasing the federal funds rate to a range between 5.00% and 5.25% ‘seems like a very reasonable assessment of what we’ll need to do this year to get the supply and demand mismatches down.’

Williams’ remarks came after Chair Jerome Powell emphasized on Tuesday that a process of ‘disinflation’ was taking place while standing by his forecast for interest rates.

The dollar index, which compares the value of the dollar to six other currencies, increased by 0.029% to 103.460 on Thursday after falling by about 0.3% the previous day.

The index is just slightly below the 103.96 one-month high it reached on Tuesday during a brief rise in response to the employment report released on Friday, which revealed that non-farm payrolls had increased by 517,000 jobs in January.

Although the report increased speculation that the Fed will resume its previously aggressive monetary policy, Powell did not elaborate on that idea in his speech on Tuesday.

The euro was up 0.04% at $1.0713 in the meantime, off its one-month bottom of $1.067 reached on Tuesday.

Sterling was last trading at $1.2064, down 0.06% on the day, while the Japanese yen dropped 0.11% to 131.54 against the dollar.

The kiwi increased by 0.06% to $0.631, while the Australian dollar increased by 0.04% to $0.693.

The Fed funds rate is expected to peak just above 5.1% by July before declining to 4.8% by year’s end, according to market predictions.

Williams reaffirmed in his remarks that he still thought it was crucial for monetary policy to reach and maintain levels that would halt economic expansion ‘for a few years.’

Investor attention will now shift to the U.S. inflation data due on Tuesday of next week.

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