Saturday, January 28, 2023

Dollar Heads for Weekly Loss, as Experts Warn Near-Term Reprieve Unlikely By


© Reuters.

By Yasin Ebrahim – The dollar fell Friday and is set for a weekly loss, with experts suggesting a reprieve for the greenback is unlikely, as a disappointment over stimulus may not send investors rushing into the world reserve currency.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.22%, to 92.75.

“Overall, we’re neutral to slightly negative on the dollar this week and believe investors can weather news that a US stimulus bill may not be forthcoming ahead of the election,” Dutch bank ING said in a note. 

The bank also suggested that a bullish round of economic data in the coming week will ease fears of a double-dip recession, dealing another blow to safe-haven demand in the greenback. 

Third-quarter GDP, expected to show a huge 35% quarter-on-quarter annualized bounce, and fresh insights on U.S. consumer confidence and durable goods orders will “not be supporting double dip fears just yet,” the Dutch bank said.

The dollar has also been weighed down by losses against the Chinese renminbi amid positive flows in China and upbeat economic data. The decline could likely continue as there will likely be much interest in China’s 14th Five Year plan – leaders meet October 26-29 – which could “prompt more flows into Chinese asset markets,” it added.

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