Dollar, strong… Returning the Breathing Dimension – Yonhap Infomax

(New York = Yonhap Infomax) Correspondent Bae Soo-yeon = The value of the dollar rose slightly. It is interpreted that the dollar has started to rebound as a way to take a breather once morest the weakness that continued from last weekend. Senior officials of the Federal Reserve System (Fed) have strengthened their hawkish moves, such as being wary of expectations of a premature pivot (pivot: policy shift).

According to Yonhap Infomax (screen number 6411), the dollar recorded 132.210 yen in the New York foreign exchange market as of 9:00 am on the 10th (hereinfollowing US Eastern time), up 0.415 yen (0.31%) from the battlefield price of 131.795 yen in New York.

The euro moved at 1.07271 dollars per euro, down 0.00039 dollars (0.04%) from the battlefield price of 1.07310 dollars.

The euro recorded 141.82 yen per euro, up 0.39 yen (0.28%) from the previous record of 141.43 yen.

The Dollar Index, which reflects the value of the dollar once morest six major currencies, recorded 103.319, up 0.12% from the battlefield 103.319.

Senior Fed officials have focused on initially suppressing expectations of a pivot, which would signify a dramatic change in monetary policy.

Atlanta Fed President Raphiel Bostick insisted the day before that the Fed should raise its benchmark interest rate by at least 5% by the beginning of the second quarter. President Bostic said he was not in favor of a pivot (policy shift, interest rate cut) and said that the benchmark interest rate should be kept at a high level for a long time to contain inflation.

San Francisco Federal Reserve President Mary Daly also predicted that the Fed would raise the benchmark interest rate to more than 5%. Daley said the day before that the Fed’s tightening had entered a more demanding second phase, saying that “in my judgment, above 5% is likely to be possible.”

Risk currencies once morest the dollar, such as the euro and pound, continued to make progress, noting that inflationary pressures in the US had slowed until the previous day.

This is because the inflation pressure in the United States has been interpreted as slowing down.

According to the results of a consumer outlook survey for December released by the New York Fed the day before, the expected inflation rate following one year was 5.0%, down 0.2 percentage points from the previous month (5.2%). This is the lowest since July 2021.

Prior to this, the December employment report released last week also boosted the dollar’s weakness. In the US, nonfarm payrolls increased by 223,000 in December of last year, exceeding the market’s forecast of an increase of 200,000, but this is because wage growth has slowed.

Hourly wages rose 0.3% from the previous month, slower than the 0.4% rise from the previous month, and rose 4.6% year-over-year, down from 4.8% the previous month. It was lower than the market expectation of 0.4% from the previous month and 5.0% from the previous year.

Expectations that the Fed will cut the rate hike to the level of 25 basis points, a baby step, have also weakened. According to the Chicago Mercantile Exchange (CME) FedWatch, the probability of the US Fed raising the benchmark interest rate by 0.25 percentage point in February is reflected at 76.2% in the Federal Funds (FF) interest rate futures market. The probability of the Fed raising it to 50 basis points was 23.8%.

The offshore yuan’s progress has slowed. It is interpreted that expectations following China’s economic resumption were reflected in the price. The People’s Bank of China (PBOC) has announced that it will implement monetary stimulus this year, focusing on supporting domestic demand, and has decided to extend mortgage interest rate cuts for first-home buyers. The offshore yuan is trading around 6.79 yuan, up slightly from the previous day’s closing price of 6.7821 yuan.

“The market is trying to stay one step ahead of the Fed, but it’s not listening to what the Fed is saying,” said Fiona Cinkota, strategist at CitiIndex.

“And the Fed is sending the message very clearly that interest rates are going to be higher and will stay high for quite some time,” he said.

“If you look at expectations for inflation later this week, core inflation is likely to remain high,” he added.

“It doesn’t matter how you look at it,” he said. “(Core inflation) is still above the Fed’s target.”

Commerzbank said, “The stock market rose following two senior Fed officials, including President Rafiel Bostic and Mary Daley, strengthened their hawkish remarks, such as saying that the Fed will raise the rate to above 5% and keep it high for some time. reduced,” he said.

“Given the recent easing of financial conditions, including the recent rebound in stock markets, falling bond yields and a weaker US dollar, Fed Chair Jerome Powell’s remarks offer some opportunity to reset the situation,” said CMC strategist Michael Hewson. We can provide,” he diagnosed.

Strategists at BlackRock, the world’s largest asset management company, diagnosed on the day that the Chinese economy is expected to grow by 6 percent this year, and that it will serve as a buffer once morest the global slowdown following the economic downturn in developed countries.

However, they warned that China’s rebound may be temporary.

“We don’t see a return to pre-COVID-19 levels of economic activity even if China’s economy reopens,” they said.

They added that growth is likely to fall once more once the economy gets back on track.

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This article was served at 23:14, 2 hours earlier on the Infomax financial information terminal.

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