© Reuters. US dollar banknotes in an illustrative photo from Reuters archive.
LONDON (Reuters) – It fell to its lowest level since mid-June on Friday, weighed down by growing expectations that the European Central Bank could soon stop raising interest rates, while the dollar rose broadly ahead of a speech by Federal Reserve Chairman Jerome Powell.
Reuters quoted eight informed sources as saying that policy makers at the European Central Bank are increasingly concerned about weak growth prospects, and that the discussion is still open, but the momentum to temporarily stop raising interest rates is increasing.
The euro fell to a new low after this report, to record its lowest level since mid-June at approximately $1.0766. The euro fell 0.3 percent in the latest trading of the day.
The dollar index, which measures the greenback’s performance against six other major currencies, rose to its highest level since June 7 at 104.25. The index rose more than 2 percent in August, poised to end a two-month losing streak.
Powell will speak at the Economic Policy Symposium in Jackson Hole at 1405 GMT, while European Central Bank President Christine Lagarde will speak at the same event later in the day.
The Euro and the Pound were negatively affected this week as weak business activity data prompted investors to lower their expectations for further interest rate hikes in the Eurozone and Britain.
Sterling touched the lowest level since June at about $1.2560, before paring its losses to around $1.2591.
Sterling has fallen nearly 1 percent this week and is close to recording its biggest weekly drop in five weeks.
On the other hand, it tends to continue gains for the sixth consecutive week, supported by evidence of the strength of the US economy that reinforced expectations that interest rates will remain high for a longer period.
The yen fell 0.16 percent to 146 per dollar, and with the Japanese currency reaching the level at which Tokyo intervened last year, traders are cautious in search of signs of taking similar steps this time.
The Australian dollar remained unchanged at approximately $0.642, while the New Zealand dollar fell 0.3% to $0.590.
(Prepared by Amira Zahran for the Arabic Bulletin – Edited by Suha Jadu)
2023-08-25 09:41:00
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