PT Solid Gold Berjangka | Dollar Steady But Remains Vulnerable After Fed Steer
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Solid Gold Berjangka | The passage you provided discusses the current state of global currencies and financial markets. Here are the key points from the passage:
- The major global currencies were steady early on Monday, and they seemed poised to extend their uptrend from the previous week as the U.S. dollar was nursing its losses. This decline in the dollar came after the Federal Reserve adopted a less hawkish stance.
- The dollar index was flat at 105.11, and the euro was trading at $1.0726. The dollar had experienced its heaviest fall since mid-July, declining more than 1% last week and hitting a six-week low.
- World stocks had their strongest week in a year, as expectations grew that the Federal Reserve had completed its rate hikes.
- Factors contributing to the dollar’s decline included weakness in U.S. jobs data, softer manufacturing numbers worldwide, and a drop in longer-dated Treasury yields. This led to rallies in other currencies such as the British pound (sterling), the Australian dollar (Aussie dollar), and the Japanese yen.
- The article suggests that this trend of a weaker dollar may continue through November, with the condition for a sustained dollar selloff being signs of improvement in the euro zone, China, and other regions.
- Treasury yields dropped last week due to weak U.S. jobs and manufacturing data, as well as comments from Fed Chair Jerome Powell indicating “balanced” risks. Additionally, the U.S. government lowered its refinancing estimate for the quarter and announced smaller increases in long-dated debt auctions than expected.
- Futures markets indicate a high probability that the Fed will not raise interest rates further, and there is also a significant chance of policy easing as early as June. The European Central Bank is expected to cut rates by April, and the Bank of England is anticipated to ease in August.
- The Japanese yen weakened slightly against the dollar but recovered from lows reached the previous week, indicating that Japanese authorities might not need to intervene in the currency markets.
- Sterling was trading steadily, with upcoming data on Britain’s GDP for the fourth quarter expected to influence its performance. Despite a recent rally, sterling remains down about 6% over the past four months.
- The decline in the U.S. dollar and Treasury yields has supported the price of gold, which is currently trading at $1,990 per ounce, near a recent five-month peak of $2,009.
Overall, the passage highlights the impact of the Federal Reserve’s policy shift, weaker economic data, and changing market expectations on global currencies, stocks, and other financial assets.