2023-11-16 19:39:08
Around 8:20 p.m., the greenback lost only 0.06% once morest the European currency, at 1.0854 dollars per euro, as well as once morest the British pound, which rose slightly by 0.02% to 1.2418 dollars. .
The dollar stabilized once morest the main currencies on Thursday following a retreat following new economic data suggesting a slowdown in the American economy, which brings the prospect of a rate cut by the Federal Reserve (Fed) closer. .
Around 7:20 p.m. GMT, the greenback lost only 0.06% once morest the European currency, at 1.0854 dollars per euro, as well as once morest the British pound, which rose slightly by 0.02% to 1.2418. dollar.
American industrial production, an indicator of the good health of the American economy, turned out to be weak (down 0.6% in October) according to figures published Thursday “partly because of strikes in the automobile sector”, remarked Jim Reid, analyst at Deutsche Bank.
Added to weekly unemployment claims in the United States which are up and higher than estimates, these data seem to show American activity which is slowing down. They therefore reinforce the probability that the monetary tightening of the American Federal Reserve (Fed) has come to an end, and have contributed to the dollar stinging once morest the main currencies.
The greenback also digested “lower than expected US inflation figures on Tuesday”, at 3.2% year-on-year in October, while other economic data released on Wednesday also supported “the idea that the Reserve federal government (Fed) might (…) put an end to its interest rate increases,” recalled Ipek Ozkardeskaya, of Swissquote Bank.
Indeed, producer price inflation in the United States turned out to be “lower than expected”, and retail sales fell in October for the first time since March – a decline however ” softer than expected” – according to the analyst.
These data “come to support the idea according to which the American economy (…) is slowly slowing down, while inflation is settling at a satisfactory pace”.
But if with “the drop in inflation, the need to reduce rates becomes obvious”, the Fed is nevertheless keen not to cancel the effects of its restrictive monetary policy by reducing them too early, tempers Stephen Innes, analyst at SPI AM. Investors are already betting almost 50% that the first rate cut by the Fed will come in May 2024.
Fed Governor Lisa Cook indicated on Thursday that “a soft landing is possible” for the American economy, “with continuing disinflation and a solid labor market.”
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