The dollar fell to its lowest level in more than a week as investors took profits after the dollar’s price rose against most other currencies.
The Dollar index (DXY) – which compares the USD against a basket of key partner currencies – ended September 9 in Vietnam time down 0.5% to 108.86, previously touching 108.35 – lowest level in more than a week.
“The market is getting a little nervous about ‘historic’ price points, which are really historic,” said Greg Anderson, head of global currency strategy at BMO Capital Markets (in New York). Therefore, the market decided not to push the USD to strengthen further at this time.”
According to Mr. Anderson: “Perhaps the USD will stay at current levels or only move slightly until the FOMC (Federal Open Market Committee) meeting. The market looked at everything overnight. passed and decided that this was a good point to take profits, balance positions, and in the process pushed DXY down. But this is not a reversal of the uptrend in USD strength.”
“We’re finally seeing central banks pushing back on this stronger dollar narrative and we’re starting to see opportunities,” said Simon Harvey, head of currency analysis at Monex Europe. Financial authorities react to the causes of that, especially in Europe”.
Among the strong gainers in the last session of the week (Friday, September 9), the euro at one point rose 1.2% to a three-week high of 1.0114 USD/EUR, a day. after the European Central Bank (ECB) raised the basic interest rate by 75 basis points, an unprecedented increase. At the end of the session, EUR still gained 0.5% to 1.0048 USD.
“We believe yields in Europe will continue to be positively supported after the ECB raised rates as aggressively as expected,” said Samy Chaar, chief economist at Lombard Odier. in the US is slowing down”. “That’s probably why the dollar is falling.”
Europe still faces a weak economic outlook, with sky-high energy prices putting heavy pressure on consumers and businesses. On Friday, the European Union’s energy ministers split over whether to cap the price of Russian gas, as they met to find solutions to protect citizens. in the context of the recent sharp increase in energy prices.
The market now predicts that there is an 87% chance that the Fed will not raise interest rates as sharply as 75 basis points like the ECB at this month’s meeting. Data on US consumer prices due out next week will likely show how the Fed will act. Therefore, this data is being watched closely by the market.
Currencies seen as riskier also benefited as investor sentiment improved – as evidenced by both rising European and US stock markets.
The British pound rose 0.8% in the last session, to 1.1584 USD / GBP, after falling slightly in the previous session. The Bank of England on Friday said it would postpone its next monetary policy meeting for a week in mourning for the Queen.
The pound has just had a tumultuous week, hitting a 35-year low, shortly after jumping on June 9, after Britain had a new Prime Minister and Queen Elizabeth of England died. . Queen Elizabeth’s departure on Thursday has increased the unrest in the problems facing Britain.
Britain’s new Prime Minister, Liz Truss, has widely announced the Government’s plans, including limiting consumer energy bills for two years and providing billions of dollars in support for electricity companies. Investors are still waiting to see the specifics of what the plan will look like, as well as to see how Ms. Truss and her new government will handle a very difficult situation with rising inflation and the economy economic growth slowed down.
The Japanese yen just experienced its strongest gain in a month, rising 1.2% to 142.34 JPY/USD, recovering from a 24-year low hit in the previous session.
The Governor of the Bank of Japan, Haruhiko Kuroda, on Friday, after a meeting with Prime Minister Fumio Kishida said a rapid increase in the yen was undesirable.
The Australian dollar also experienced its strongest rally in a month, up 1.5% against the USD, to $0.6850. This coin has also recovered from very low levels in recent sessions.
China’s yuan continued to rise in Friday session as the dollar fell. On the spot market in China, the yuan last session increased 169 pips, or 0.24%, up 0.24% from the close of the previous session, to 6.9394 CNY/USD. However, for the whole week, CNY still fell.
Even cryptocurrencies rallied in the past session, surpassing $20,000, as the dollar fell, with Bitcoin ending September 9 ET up nearly 9% to $21,033, its biggest session since late February. In the previous session, Bitcoin dropped to just $18,540. This session ether also gained more than 5%b to a 3-week high of $1,746.
Gold prices rose in the last session of the week as the dollar weakened, although the prospect of a Fed rate hike prevented gold prices from rising sharply.
At the end of September 9 Vietnam time, spot gold price increased 0.3% to 1,712.69 USD/ounce, before that price rose to the highest level since August 30, at 1,729.29 USD. Gold for December delivery also rose 0.2 percent to $1,723.60.
“The US Dollar Index actually fell sharply overnight and that supported the gold and silver markets,” said Jim Wyckoff, senior analyst at Kitco Metals.
However, independent analyst Ross Norman said the gold market continues to see a slow and steady decline in exchange-traded funds (ETFs) and volume in the US futures market continues to decline. weak, indicating that the increase is unlikely to be sustained.”
References: Refinitiv, Coindesk