(New York = Yonhap Infomax) Correspondent Bae Soo-yeon = The value of the dollar has risen slightly. The dollar is interpreted to have started to rebound as a way to catch a breather against the weakness that has continued since last weekend. Senior Federal Reserve System (Fed) officials have stepped up their hawkish moves, such as being wary of expectations of a premature pivot (pivot: policy change).
According to Yonhap Infomax (screen number 6411), the dollar registered 132.210 yen in the New York foreign exchange market at 9:00 on the 10th (hereinafter US Eastern time), up 0.415 yen (0.31% ) compared to the battlefield price of 131,795 yen in New York.
The euro moved to $1.07271 to the euro, down $0.00039 (0.04%) from the battleground price of $1.07310.
The euro registered 141.82 yen to the 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 against six major currencies, registered 103.319, up 0.12% from battleground 103.319.
Senior Fed officials initially focused on suppressing expectations of a pivot, which would mean a drastic change in monetary policy.
The day before, Atlanta Fed Chairman Raphiel Bostick pressed the Fed to raise its key interest rate by at least 5% by the start of the second quarter. Chairman Bostic said he was not in favor of a pivot (policy change, interest rate cut) and said the benchmark interest rate should be kept at a high level for a long time to contain inflation.
San Francisco Federal Reserve Chair Mary Daly also predicted that the Fed would raise the key interest rate to above 5%. Daley said the day before that the Fed’s tightening had entered a more challenging second phase, saying “it’s possible to go above 5% in my view.”
Risk currencies against the dollar, such as the euro and the pound, continued to make gains, noting that inflationary pressures in the US had slowed a day earlier.
This is because inflationary pressure in the US has been interpreted as a slowdown.
According to the results of a consumer outlook poll for December released by the New York Fed the day before, the expected inflation rate after 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 that, the December jobs report released last week also reinforced the dollar’s weakness. In the US, nonfarm payrolls increased by 223,000 in December of last year, beating the market forecast for a 200,000, but that’s because wage growth has slowed.
Hourly wages increased 0.3% month over year, slower than 0.4% a month earlier, and were up 4.6% year over year, down from 4.8% a month earlier . It fell short of market expectations by 0.4% from the previous month and 5.0% from the previous year.
Expectations that the Fed will cut the rate hike to the 25 basis point level, a small step, have also weakened. The likelihood of the US Fed raising its benchmark interest rate by 0.25 percentage points in February is reflected at 76.2% in the US interest rate futures market, according to the Chicago Mercantile Exchange’s (CME) FedWatch. Federal Funds (FF). The probability that the Fed would take it to 50 basis points was 23.8%.
The progress of the offshore yuan has slowed down. It is interpreted that expectations following China’s economic recovery were reflected in the price. The People’s Bank of China (PBOC) announced it will implement monetary stimulus this year, focusing on supporting domestic demand, and agreed to extend mortgage interest rate cuts for first-time home buyers. The offshore yuan is trading at 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 stay higher for quite some time,” he said.
“If you look at expectations for inflation later this week, core inflation is likely to remain elevated,” he added.
“No matter how you look at it,” he said, “(core inflation) is still above the Fed’s target.”
Commerzbank said: “The stock market moved higher after two top Fed officials, including Chairman Rafiel Bostic and Mary Daley, reinforced their hawkish remarks, such as saying the Fed will raise the rate above 5% and it will hold up for a while. ,” he said.
“Given the recent easing in financial conditions, including the recent rebound in equity markets, falling bond yields and a weaker US dollar, Fed Chairman Jerome Powell’s remarks offer some opportunities to roll things over,” the strategist said. of CMC Michael Hewson. “He diagnosed.
Strategists at BlackRock, the world’s largest asset management firm, diagnosed the day that China’s economy is expected to grow 6% this year and serve as a buffer against the global slowdown following the economic downturn in the developed countries.
However, they warned that China’s rebound could be temporary.
“We do not 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 slow again once the economy gets back on track.
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This article was published at 23:14, 2 hours earlier, on the Infomax financial information terminal.
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