Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
🙌 It's Here: the Only Stock Screener You'll Ever Need Get Started
Dollar hits one-week high on caution ahead of central bank meetings
Published Jan 31, 2023 02:46AM ET
Updated Jan 31, 2023 03:12AM ET
© Reuters
By Geoffrey Smith
Investing.com -- The dollar hit its highest level in a week in early trading in Europe on Tuesday, as markets worldwide dialed down their risk appetite ahead of some big central bank meetings over the next couple of days.
By 03:00 ET (08:00 GMT), the dollar index, which tracks the greenback against a handful of advanced economy currencies, was up at 102.06, having earlier hit a high of 102.19.
Markets have had an upbeat start to the year, pushing the dollar down and higher yielders up as investors look through the current high inflation rates worldwide to focus on the prospect of possible interest rate cuts later this year. However, that impulse has run out of steam in the last 24 hours, with weak European data, in particular, challenging the narrative of a soft landing and an early turn in the policy cycle.
German retail sales data for December, released earlier, were considerably weaker than expected, falling -5.3% on the month in real terms, and went some way to explaining why GDP in Europe's largest economy fell 0.2% in the final quarter of the year. French consumer spending also fell 1.3% on the month, further illustrating the pressures on Europe's consumers, although the French economy overall eked out a gain of 0.1% on the quarter.
The euro was largely unmoved, however, losing less than 0.1% to $1.0840.
The Eurozone publishes CPI data for December on Wednesday, but Pantheon Macroeconomics' Claus Vistesen warned that the numbers will "have to be taken with a pinch of salt" given that Germany has delayed publishing its own figures due to technical problems. French consumer prices rose a little less than expected, providing some relief after Spanish and Belgian inflation data on Monday sparked fears of a round of upside surprises across the Eurozone.
Elsewhere, the pound drifted lower after the International Monetary Fund warned that the U.K. would be the only one of the G7 economies to contract this year. U.K. lending data are due from the Bank of England at 04:30 ET.
The IMF's winter update was otherwise upbeat, raising the Fund's growth forecasts for the first time in a year, reflecting the reopening of the Chinese economy.
The reopening boost was in evidence overnight as the official Chinese composite purchasing managers' index rocketed back into growth territory, hitting a seven-month high of 52.9. Both the manufacturing and services sub-indices rose back above the key 50 threshold that typically indicates growth.
The offshore yuan was steady at 6.7581 to the dollar.
Related Articles
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.