Dollar sharpens decline to six-month nadir

Economies.com
1 month ago

Dollar fell in European trade for the fourth straight session, hitting six-month lows amid a strong selloff wave. 

 

Demand on copper declined since Fed Chair Jerome Powell's last bearish speech, which bolstered the case for a 0.5% rate hike only in December. 

 

Dollar suffered as well, as risk appetite improved in the markets after Chinese cities eased Covid 19 restrictions. 

 

The Index

 

The dollar index fell 0.4% to 104.11, the lowest since June, with a session-high at 104.76, after closing down 0.2% on Friday, the third loss in a row. 

 

The dollar index is down 1.5% so far this week, the second weekly loss in a row following bearish remarks by Fed Chair Jerome Powell. . 

 

Jerome Powell 

 

Fed Chair Jerome Powell struck a much more bearish chord in recent statements, noting the Fed will slow down its pace of policy tightening in upcoming meetings.

 

After such statements, chances of a 0.50% rate hike by the Fed rose from 67.5% to 80%, then 82% now, while chances of a 0.75% rate hike fell from 32.5% to 18% currently.

 

Chinese Developments

 

Chinese cities started easing Covid 19 restrictions this week, boosting confidence in the economy.

 

China's economy was hammered recently by the strict zero tolerance policies which hampered trade and consumption, and led to rare protests.

 

Data

 

Investors await important US data on the services sector, which might provide important clues on the health of the world's largest economy in the fourth quarter. 

 

US ISM services PMI is expected down to 53.5 in November from 54.4 in October. 

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