©Reuters. Illustrative image of a $100 bill in a Reuters stock photo.
By Harry Robertson and Tom Westbrook
SINGAPORE (Reuters) – Little changed on Thursday, with investors digesting mixed US economic data as the pound rose ahead of government fiscal plans.
The greenback fell in recent weeks as inflation data and comments from Federal Reserve officials suggested the bank may soon slow the pace of interest rate hikes.
However, the dollar stabilized on Thursday after October US retail sales data, released on Wednesday, came in stronger than expected.
It also consolidated at $1.039 after hitting its highest level since July at $1.048 on Tuesday.
The dollar index, which measures the greenback’s performance against six major currencies, remained unchanged at 106.27. The index is down more than 7% since hitting a 20-year high in September, but has remained up about 10% for the year.
Simon Harvey, chief foreign exchange analyst at Monex Europe, said the dollar has stabilized as investors try to determine the direction of the US economy.
“Positive consumption data suggests we’re not facing a hard recession (for the economy). But is this good for risky assets or will it encourage further Fed tightening?”
Harvey said the biggest price move for the pound could be when UK Finance Minister Jeremy Hunt announces government budget plans later Thursday. He is expected to raise taxes and cut spending, despite a looming recession, in a bid to boost Britain’s standing in the markets and cool inflation.
The British pound rose 0.18% against the dollar to $1.193 in morning trading in London, and was up by the same amount against the euro.
Hardline comments by Fed officials Wednesday night added to suspicions of a policy shift, with San Francisco Federal Reserve Chair Mary Daley saying a pause was out of the question.
The dollar fell 0.2% from Thursday to 139.28, while hovering around its lowest level in three months. It fell 3.7% on Thursday of last week as US consumer price inflation data for October came in lower than expected.
And it fell 0.36% to 7.126 against the dollar as new Covid infections raised concerns that officials could order more closures.
The Australian dollar fell 0.15% to $0.673, while its New Zealand counterpart rose 0.28% to $0.616.
(Prepared by Doaa Muhammad for the Arab Bulletin)
