The dollar fell once morest most of the major currencies, today, Thursday, with the waning support it received earlier from statements by Federal Reserve officials that the US central bank is determined to address the highest inflation rate in decades by raising interest rates significantly, a day before the US jobs data that The market awaits.
The Bank of England raised interest rates by the most since 1995, but the pound fell as the bank warned that a prolonged recession was looming amid expectations of inflation exceeding 13%.
The dollar index fell 0.338% to 106.110, and the euro rose 0.35% to $1.02.
The dollar index extended its previous losses slightly, affected by data showing that the number of Americans who filed new applications for unemployment benefits increased last week, while the US trade deficit narrowed sharply in June as exports rose to a record level, a trend that may see trade continue to contribute to supporting GDP in the third quarter.
The Japanese yen rose 0.4% to 133.32 yen to the dollar.
Investors will get an important insight into how the US economy will perform tomorrow, Friday, when the Labor Department releases employment data for July, and signs of continued strength in the US labor market are likely to boost expectations of further monetary policy tightening from the Federal Reserve.
Federal Reserve officials continued their comments resisting the perception that US interest rates are close to peaking.
San Francisco Fed President Mary Daly and Minneapolis Federal Reserve Bank President Neil Kashkari last night expressed their intention to curb high inflation, but the impact of Fed officials’ comments appears to be fading.
A Archyde.com poll conducted today, Thursday, showed that the strength of the dollar has not yet reached its peak.
The survey found that 70% of respondents believe the dollar has not yet peaked in this cycle, even following its index reached a two-decade high in July.
Sterling fell following the Bank of England meeting, and fell in the latest trading 0.5% to $ 1.2090, and the bank raised the interest rate by 50 basis points to 1.75%, the highest level since late 2008, but it issued a warning of recession.