PT Solid Gold Berjangka | Dollar Slips Lower, Continuing Last Week’s Selloff
USD GBP/USD EUR/USD USD/JPY, AUD/USD,
Solid Gold Berjangka | The U.S. dollar has weakened in early European trade, hitting a six-week low due to a less hawkish stance from the Federal Reserve. Here are some key points from the provided information:
- The Dollar Index, which measures the value of the U.S. dollar against a basket of six other major currencies, dropped 0.1% to 104.782 at 03:20 ET (08:20 GMT), after experiencing a decline of over 1% the previous week, marking its most substantial fall since mid-July.
- This weakening of the dollar is attributed to the Federal Reserve’s recent policy-setting meeting, where they signaled a more dovish stance on future interest rate hikes.
- The U.S. nonfarm payrolls report for October, released on Friday, indicated slower job growth than expected, suggesting a cooling U.S. labor market. The labor market’s strength had been a key factor in the Fed’s hawkish policy stance earlier this year.
- Fed fund futures now suggest an 85% probability that the Federal Reserve has finished its rate-hiking cycle, and an 80% probability that it will begin cutting rates in June.
- In the currency markets, the Euro (EUR/USD) has risen 0.1% to 1.0743, reaching levels last seen in September, primarily due to the dollar’s weakness rather than any particular strength in the European economy.
- The British Pound (GBP/USD) also rose 0.1% to 1.2384, continuing its strong performance from the previous week, ahead of the release of Britain’s GDP data for the fourth quarter.
- The Australian Dollar (AUD/USD) increased by 0.1% to 0.6514 and is close to a two-month high as markets anticipate a 25 basis point rate hike by the Reserve Bank of Australia (RBA) on Tuesday. This is expected due to recent upticks in Australian consumer inflation and unexpectedly positive retail sales data in the third quarter, which indicates higher inflation expectations.
- USD/JPY rose 0.1% to 149.58, while USD/CNY fell 0.3% to 7.2789. These currency pairs are influenced by factors such as trade and inflation data, which is expected to provide insights into the economic recovery in Japan and China.
Overall, the U.S. dollar’s decline is a response to the Federal Reserve’s dovish signals and weaker economic data, which have shifted market expectations away from further interest rate hikes in the near term.