Saturday, January 28, 2023

Dollar Retains Strength Amid Lockdowns; Euro Looks to ECB By


© Reuters.

By Peter Nurse – The dollar was largely unchanged in early European trade Thursday, holding onto recent gains as new lockdowns in Europe to combat the surge in Covid-19 cases prompted demand for safe havens.

At 2:55 AM ET (0655 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was flat at 93.403, having gained around 0.5% so far this week.

Concerns of further damage to the economic recovery have grown as French President Emmanuel Macron and German Chancellor Angela Merkel returned their countries back into lockdown on Wednesday, after recording new record levels of cases in the second wave of the Covid-19 virus.

was up 0.1% at 1.1746, after sliding to a one-week low of $1.1718 overnight, on speculation that the European Central Bank may move up additional stimulus – which many expect for December’s meeting – to today’s meeting.

“The case for even more ECB easing has strengthened further lately, but we still expect the central bank to wait until December with further easing,” said analysts at Nordea, in a research note.

“What the ECB could do next week is to explicitly commit to a faster pace of purchases, or at the very least give clear signals that more easing will likely be in store in December. The latter step is more likely than the former, and should be enough to avoid a disappointment in financial markets,” the bank added.

It’s also a heavy day for U.S. data, with the weekly report on in focus. will provide for more dramatic headlines, but the data has essentially been overtaken by the events of the last few weeks already.

Elsewhere, was largely flat at 104.28, after the dollar dropped to its lowest level in more than a month against the safe-haven yen on Wednesday.

The kept its key interest rates and asset purchases unchanged earlier Thursday, as widely expected. However, the central bank cut its growth forecast for the year ending in March to a 5.5% contraction from a 4.7% drop, citing a delayed recovery in the services sector.

rose 0.2% to 1.3002, showing some strength as European Union and U.K. negotiators continue discussions over the trading arrangements between the two blocs, raising hopes that a Brexit deal could be reached by early November.


Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link


Please enter your comment!
Please enter your name here



Related Stories