Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

U.S. dollar advances vs major currencies as risk appetite fades

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – The dollar rose against major currencies on Wednesday in choppy trading, gaining safe-haven bids as risk appetite worsened with stocks on the defensive amid hawkish comments from U.S. Federal Reserve officials that suggested more interest rate increases are likely to tame inflation.

Analysts, however, remained convinced that the currency has already hit its peak and is in the midst of an overall downtrend.

“The dollar will continue to sputter due to the tamer outlook for both U.S. inflation and Fed policy,” said Joe Manimbo, senior market analyst, at Convera in Washington.

“The dollar is likely to remain on a descending path as long as markets price in a material risk of U.S. rate cuts later this year.”

The greenback earlier fell across board after a slate of weak economic data backed expectations that the Fed may be nearing a pause in its rate-hiking cycle.

The earlier sell-off in the dollar came after the Bank of Japan maintained ultra-low interest rates. The yen initially gained sharply, but recovered on expectations for tighter policy in the coming months.

Fed officials on Wednesday, however, dampened expectations that the U.S. central bank is nearing the end of its tightening policy.

Cleveland Fed President Loretta Mester said the Fed needs to raise interest rates a “little bit” above the 5.00% to 5.25% range in order to bring inflation to heel.

St. Louis Fed President James Bullard, for his part, said the Fed should get the policy rate of interest above 5% “as quickly as we can” before pausing rate increases needed to battle an ongoing outbreak of inflation.

Their comments helped push U.S. stocks lower and extended a rally in Treasuries that weighed on yields.

In afternoon trading, the U.S. currency rose against the commodity-linked currencies such as the Australian, New Zealand, and Canadian dollars, which sensitive to risk appetite.

The Australian dollar fell 0.7% to US$0.6936, after hitting its highest since August last year. The New Zealand dollar traded flat on the day at US$0.6430. Earlier in the session, it rose to its highest level in a month.

Against the Canadian dollar, the buck rose 0.8% to C$1.3497.

The U.S. unit earlier dropped after data showed that U.S. retail sales fell more than expected in December, pulled down by declines in purchases of motor vehicles and a range of other goods. They fell 1.1% last month. Data for November was revised to show sales dropping 1.0% instead of 0.6% as previously reported.

A separate report from the Labor Department showed the producer price index for final demand decreased 0.5% in December after rising 0.2% in November. The PPI report followed data last week showing that monthly consumer prices fell for the first time in more than 2-1/2 years in December.

“The PPI and retail sales numbers show that there are disinflationary pressures going on,” said Juan Perez, director of trading at Monex USA in Washington.

U.S. manufacturing output also fell 1.3% in December, more than expected, data showed.

In Japan, the BOJ kept intact its yield curve control (YCC) targets, set at -0.1% for short-term interest rates and around 0% for the 10-year yield, by a unanimous vote. It also made no change to its guidance that allows the 10-year bond yield to move 50 basis points either side of its 0% target.

Some analysts said the BOJ was likely to tighten policy soon and the currency walked back some of its losses.

The dollar rose as much as 2.7% to 131.58 yen before gains were pared. It was last up 0.6% at 128.825 yen.

Sterling rose to a five-week high even as consumer price inflation fell to a three-month low as core CPI failed to moderate, remaining at 6.3%. The pound was last up 0.4% at $1.2336.

The euro was little changed $1.0790. It earlier posted sharp gains after European Central Bank member Francois Villeroy de Galhau said it was too early to speculate about what the central bank would do at the March meeting. Media reports on Tuesday said the ECB could slow its pace of tightening further in March.


Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

Currency bid prices at 3:59PM (2059 GMT)

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

Previous Change


Dollar index 102.4000 102.4000 +0.02% -1.053% +102.9000 +101.5100

Euro/Dollar $1.0791 $1.0790 +0.00% +0.70% +$1.0888 +$1.0767

Dollar/Yen 128.8550 128.1200 +0.58% -1.71% +131.5700 +127.5700

Euro/Yen 139.03 138.22 +0.59% -0.91% +141.6800 +138.2700

Dollar/Swiss 0.9168 0.9218 -0.55% -0.85% +0.9245 +0.9086

Sterling/Dollar $1.2339 $1.2287 +0.43% +2.03% +$1.2435 +$1.2254

Dollar/Canadian 1.3498 1.3391 +0.81% -0.37% +1.3500 +1.3351

Aussie/Dollar $0.6937 $0.6986 -0.70% +1.77% +$0.7064 +$0.6936

Euro/Swiss 0.9891 0.9946 -0.55% -0.04% +0.9963 +0.9876

Euro/Sterling 0.8743 0.8778 -0.40% -1.14% +0.8804 +0.8735

NZ $0.6430 $0.6430 +0.02% +1.28% +$0.6530 +$0.6424


Dollar/Norway 9.9185 9.8795 +0.43% +1.10% +9.9370 +9.7805

Euro/Norway 10.7070 10.6436 +0.60% +2.03% +10.7250 +10.6031

Dollar/Sweden 10.3379 10.4167 -0.74% -0.67% +10.4549 +10.2408

Euro/Sweden 11.1495 11.2329 -0.74% +0.00% +11.2508 +11.1020


(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Samuel Indyk in London and Ankur Banerjee in Singapore; Editing by Marguerita Choy and Deepa Babington)


Recent Post: