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US economy performs better than expected, dollar shines, as yen hits 10-month low

7 Sep 2023 , 10:12 AM

On Thursday, a strong dollar drove the yen to a 10-month low and kept the euro and sterling stuck near three-month lows as investors continued to have faith in the still-resilient U.S. economy despite a gloomy prognosis for global growth.

In early Asian trading, the dollar reached a new high of 147.865 yen, its highest level since late November.

The dollar was recently 0.05% higher against a basket of currencies at 104.91, maintaining some of its gains from the previous session after reaching a six-month high on the news that the U.S. services sector unexpectedly picked up in August.

The euro fell to $1.0703 on Wednesday, its lowest level since June, due to the stronger-than-anticipated report, and it last traded 0.03% lower at $1.0723.

Similar to other currencies, sterling fell 0.07% to $1.24985, having hit a three-month low of $1.24835 the previous day.

According to the Federal Reserve report released on Wednesday, recent U.S. economic growth has been ‘modest,’ job growth has been ‘subdued,’ and inflation has declined in most regions of the nation.

According to the CME FedWatch tool, market pricing indicates a close to 47% possibility that the Fed will raise rates again in November, despite expectations that they will hold rates steady later in the month.

Bank of England (BoE) Governor Andrew Bailey, on the other hand, stated on Wednesday that the central bank is ‘much nearer’ to ending its rate-hike cycle, while borrowing rates may still need to increase further due to persistent inflation pressures.

The decision to raise interest rates next week was still up in the air, but policymakers from the European Central Bank warned investors that one possibility was for borrowing prices to increase.

Both currencies are hovering close to their most recent 10-month lows as the Australian dollar dropped 0.05% to $0.63795 and the New Zealand dollar dropped 0.01% to $0.5869.

Later on Thursday, China’s trade figures are due, and if they show further weakening in the world’s second-largest economy, it might put additional pressure on the currencies of the two antipodean countries.

The offshore yuan recently traded at 7.3241 per dollar, down slightly.

For feedback and suggestions, write to us at editorial@iifl.com

The 10 Strongest Currencies In The World – Forbes Advisor

Related Tags

  • Dollar
  • FOREX
  • US
  • Yen
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