2024-08-15 19:10:47
The dollar regained strength on Thursday after better-than-expected U.S. consumer and employment data ruled out the possibility of a broader interest rate cut by the Federal Reserve.
The dollar regained strength on Thursday after better-than-expected U.S. consumer and employment data ruled out the possibility of a broader interest rate cut by the Federal Reserve.
At around 6:00 p.m. GMT, the dollar was up 1.17% against the yen at 149.08 yen per dollar and down 0.35% against the euro at $1.0974 per dollar.
“This morning’s tsunami of data suggests the labor market remains in good shape and is spurring consumer spending,” Edward Yardeni of Yardeni Research commented that investors, happy to see the specter of recession gone, piled into stocks and sold Treasury bonds.
U.S. retail sales grew 1% month-on-month in July, far exceeding market expectations.
New weekly jobless claims fell to 227,000, while analysts expected a broad stabilization from the previous week.
Recession concerns
Enough to ease recent fears of a recession in the world’s largest economy and put back on the table the possibility of the Federal Reserve cutting rates by 25 basis points in September rather than more broadly easing by 50 basis points.
“We still expect the Fed to cut the federal funds rate by 25 basis points in September. This could also be the only decline this year.Edward Yardeni said, adding that the market is pricing in multiple rate cuts totaling 1 percentage point. “exaggerate”.
Treasury yields, which move inversely to bond prices, rose to 4.10% on the 2-year bond from 3.95% the day before, while the 10-year bond yield rose to 3.92% from 3.83% the day before, boosting the dollar to become more profitable.
As for the pound, despite falling against the dollar on Thursday, it appreciated against other major currencies, especially the euro, after the UK reported second-quarter economic growth of 0.6%. The figure was in line with analysts’ expectations, although it was a slight slowdown compared to the previous quarter. Against the euro, the pound rose 0.57% to 85.36 pence. “The UK economy has recovered after a technical recession last year.”, written by Matthew Ryan from Ebury.
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