Dollar consolidates ahead of Fed Chairman’s intervention

Tuesday evening, the greenback gained 0.12% once morest the single currency, to 1.0326 dollars for one euro. It also clawed back some ground once morest the pound and the franc.

The dollar strengthened slightly on Tuesday, in a calm market, on the eve of a new intervention by the president of the American central bank (Fed).

The greenback gained 0.12% once morest the single currency, to 1.0326 dollars for one euro. It also clawed back some ground once morest the pound and the franc.

Accident of the day, the Canadian dollar dropped 0.63% once morest its American cousin, at 1.3583 “loonie”, one of the nicknames of the Canadian currency, for one American dollar.

However, Canadian growth came out above expectations in the third quarter, at 0.7% compared to the previous three-month period.

But “below the surface,” data released on Tuesday “revealed a much grimmer picture than the headline figure indicated,” Cassidy Rheaume of Oxford Economics said in a note.

Demand is thus showing signs of weakening and the high level of business inventories portends a slowdown in activity in the fourth quarter, which the economist sees as marked by a contraction in gross domestic product (GDP).

The small amplitude of the movements seen in the foreign exchange market on Tuesday was, in part, attributable to the uncertainty relating to China, explained Adam Button, of ForexLive.

“The market is struggling to interpret the news from China”, according to the analyst, for whom the authorities are taking the direction of a gradual easing of health restrictions.

“How the dollar ends the month might depend on what Fed Chairman (Jerome) Powell says on Wednesday and Friday’s monthly jobs report” in the United States, according to Joe Manimbo of Convera.

The head of the Federal Reserve (Fed) will meet, at 6:30 p.m. GMT, with a member of the Brookings Institution think tank with, on the program, “the economic outlook, inflation and the job market”.

In this period of uncertainty as to the trajectory of the American economy, marked by the hope of a deceleration in monetary tightening by the Fed, Jerome Powell might give new clues.

“Powell is used to leaving no room for uncertainty regarding the decisions” of the institution, argues Adam Button.

As things stand, currency traders still favor the hypothesis of a half-point increase in the Fed’s key rate in December, and a peak above 5% in June.