Dollar Rises Against Major Rivals

RTTNews | 929 days ago
Dollar Rises Against Major Rivals

(RTTNews) - After exhibiting weakness in the Asian session on Thursday, the U.S. dollar gained in strength as the day progressed and scored fairly strong gains against its major counterparts.

The Federal Reserve, which raised interest rate by 25 basis points on Wednesday, signaled more hikes in rates to fight inflation. The central bank said although inflation has eased somewhat, it still remains elevated.

In U.S. economic news today, data released by the Labor Department today showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended January 28th.

The report said initial jobless claims edged down to 183,000, a decrease of 3,000 from the previous week's unrevised level of 186,000. The dip surprised economists, who had expected jobless claims to climb to 200,000.

Jobless claims fell to their lowest level since hitting 181,000 in the week ended April 23, 2022.

A separate report released by the Labor Department showed U.S. labor productivity surged by more than expected in the fourth quarter of 2022.

Traders also reacted to the policy announcements from the Bank of England and the European Central Bank.

The dollar index, which dropped below 101.00 in the Asian session, climbed to 101.91 before paring some gains. The index was last seen at 101.72, up 0.5% from the previous close.

Against the Euro, the dollar firmed to 1.0912 from 1.0991. The ECB raised its key interest rates by 50 basis points, in line with expectations, and signaled that policymakers plan to repeat the move in March, when they will evaluate the future path of policy rates.

Following the latest hike, the main refinancing rate, or refi, is at 3%, the deposit facility rate is at 2.5% and the lending rate is now 3.25%.

Confirming existing market expectations, the bank said policymakers intends to raise interest rates by another 50 basis points at its next monetary policy meeting in March and it will then evaluate the subsequent path of its monetary policy.

The dollar strengthened to 1.2228 against Pound Sterling, gaining from the previous close of 1.2372.

The BoE raised its benchmark rate by a half percentage point to 4% today, citing stronger-than-expected wage growth but softened its stance on future tightening as inflation is set to return to the target in medium term. The bank rate is now the highest since 2008.

Inflation is seen falling to around 4% towards the end of this year and to hit the 2% target sustainably in the medium term.

Against the Japanese currency, the dollar shed some ground and is trading at 128.68 yen, down from 128.95 yen on Wednesday.

The dollar is firm at 0.7078 against the Aussie, gaining from 0.7137.

Against Swiss franc, the dollar is up, fetching CHF 0.9136 a unit, compared with CHF 0.9085 on Wednesday.

The dollar is firm against the Loonie, trading at C$1.3318, gaining from C$1.3293.

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