U.S. Dollar Weakens Amid Expectations For Less Aggressive Fed
January 09 2023 - 05:43AM
RTTF2
The U.S. dollar lost ground against its major counterparts in
the European session on Monday, as investors bet on a slower pace
of policy tightening by the Federal Reserve in the wake of a lower
than expected wage growth in December.
Slower than expected wage growth prompted traders to scale back
bets on interest rate increases anticipated for 2023.
Fed fund futures are now pricing in a 78 percent chance of a 25
basis point rate hike at the next meeting.
Investors await Fed Chairman Jerome Powell's speech at a central
banking conference in Sweden due on Tuesday.
All eyes are on U.S. inflation data due on Thursday. Economists
expect inflation to slow to 6.5 percent in December, from 7.1
percent in November.
The greenback fell to a 5-day low of 131.31 against the yen and
a 10-month low of 0.9188 against the franc, off its early highs of
132.66 and 0.9292, respectively. The greenback is seen finding
support around 117.00 against the yen and 0.88 against the
franc.
The greenback dropped to near a 4-week low of 1.0732 against the
euro and near a 3-week low of 1.2188 against the pound, reversing
from its early highs of 1.2079 and 1.2079, respectively. The
greenback is likely to face support around 1.11 against the euro
and 1.23 against the pound.
The greenback depreciated to a 1-1/2-month low of 1.3357 against
the loonie, more than 4-month low of 0.6947 against the aussie and
near a 4-week low of 0.6412 against the kiwi, after rising to
1.3444, 0.6874 and 0.6328, respectively in early deals. The
greenback is poised to challenge support around 1.29 against the
loonie, 0.72 against the aussie and 0.66 against the kiwi.
U.S. consumer credit for November will be featured in the New
York session.
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