The Dollar rose Friday. What about other currencies?
The U.S. dollar climbed on Friday, gaining slightly after the previous session’s rally. The forex markets were quiet as investors waited for new U.S. employment data. The report is due later today and might influence the Federal Reserve’s plans for future interest rate hikes.
On Wednesday, the Fed raised rates 25 basis points. That’s lower than the previous 50 bps hikes. The agency is trying the temper its aggressive policy as inflation weakens and the country’s economy is moving towards a recession. This news sent the greenback into a red zone. The currency had been suffering substantial losses before rebounding suddenly on Thursday.
The dollar jumped against the Euro after the European Central Bank’s policy decision. On Thursday, the ECB raised rates by 50 bps to 2.5% Therefore, the common currency lost 0.1%. Today’s exchange rate was 0.1% lower at $1.09. The Euro is still much higher than the September 20-year low of $0.953 which it reached in September. Analysts believe that the ECB may be done raising rates after one more increase in March.
Alvin Tan, head of Asia FX strategy for RBC Capital Markets noted that…