© Reuters.
Investing.com – The US dollar held at a one-month high amid growing doubts about early rate cuts by the Federal Reserve, while sterling rose on the back of hot inflation data.
At 14:26 Riyadh time, the dollar index, which tracks the US currency against a basket of six other currencies, rose 0.04% at 103.157, slightly below the level of 103.55 seen earlier on Wednesday, its highest level in 13 years. December.
The dollar supports uncertainty about interest rate cuts
The US dollar received a boost late Tuesday after the Federal Reserve Governor said that although interest rate cuts are likely this year, the central bank is not considering any reduction in the near term, citing continued resilience in the US economy. .
Uncertainty about when the Fed will start cutting interest rates has also helped the dollar rebound this year after it took a hard hit at the end of 2023 following the Fed’s dovish shift at the Federal Open Market Committee meeting in December.
Market expectations for a March rate cut fell to a 62.2% chance versus 76.9% in the previous session, according to the CME (NASDAQ:) Fed Watch Tool.
It is scheduled to be released in the United States later on Wednesday, and will be closely watched for signs that consumer spending – the main driver of economic growth – remains resilient in the face of rising interest rates.
Sterling rises on inflation surprise
It rose in Europe, up 0.2% to 1.2657 after rising in the UK for the first time in 10 months in December, rising to 4.0% year-on-year from a more than two-year low of 3.9% in November.
This has led traders to scale back their expectations for interest rate cuts over the coming months, with inflation proving firmer than previously expected.
It also fell 0.1% to 1.0868, close to a one-month low despite hawkish comments from a number of European Central Bank policymakers on the need to complete the task of taming inflation.
Also, confirmation is expected in the Eurozone later in the session as it rises to 2.9% in December, from 2.4% in the previous month, reversing six months of consecutive declines.
The yuan fell after disappointing Chinese growth data
{2111} rose in Asia, rising 0.1% to 7.1969, with the yuan falling after data showed slightly lower-than-expected growth in the fourth quarter, recording only a slight rise. Previous government estimates were 5% for growth in 2023.
The reading showed that the post-Covid-19 recovery gained little momentum over the past year, setting a moderate tone for China in 2024.
Tadawul also rose by 0.5% to 147.90, with the yen falling beyond the 147 level for the first time in more than a month after falling by 1% in overnight trading.
The yen was also affected by growing expectations that it will maintain its extremely cautious path when it meets next week, especially in the wake of the recent devastating earthquake.
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2024-01-17 11:34:00
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