Why's dollar declining ahead of US growth data?

2022-05-26 14:13:25 GMT (Economies.com)
Why's dollar declining ahead of US growth data?

Dollar declined in European trade against major rivals, resuming the losses after a short recovery from four-week lows, ahead of important US growth data, expected to show a recession in the first quarter. 

 

The Index

 

The dollar index fell 0.25% on Thursday to 101.77, with a session-high at 102.27. 

 

The index rose 0.35% yesterday, the first profit in three sessions away from four-week lows at 101.65. 

 

The Fed 

 

The minutes for the May 3-4 meeting showed strong commitment to combat inflation and tighten monetary policies to neutrality. 

 

The Fed is indeed preparing for two 0.5% rate hikes in the next two meetings to increase rates to 2.0%.

 

From the US, GDP is expected to contract by 1.3% in the first quarter, compared to a 7% expansion in the previous quarter.

 

US unemployment claims are expected down a thousand to 217 thousand in the week ending May 21, while continuing claims are expected down 7 thousand to 1.31 million.

 

US existing home sales are expected down 1.9% in April, compared to a 1.2% drop in March.

 

Recession

 

Continued recession is feared to change the path of policy tightening by the Federal Reserve, in turn hurting dollar's standing against major rivals. 

 
 
 
  Symbol Last Change Chg.%
1.0427
-0.0154
1.4550%
1.2096
-0.0176
1.4311%
19.698
-1.669
7.811%
108.022
0.605
0.563%
111.50
2.47
2.27%
1799.775
-29.770
1.627%
 
 
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