Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Dollar Steady After Weak Data Trim Rate Hike Expectations

Forex Oct 20, 2021 03:16AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
EUR/USD
-1.08%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GBP/USD
-1.44%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/JPY
+0.39%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/CNY
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/NZD
+0.19%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DX
+1.12%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Geoffrey Smith 

Investing.com -- The dollar consolidated at lower levels in early trade in Europe on Wednesday, after a sharp two-day drop driven by signs of weakening economic activity in the U.S.

By 3 AM ET (0700 GMT), the dollar index that measures the greenback against a handful of advanced economic currencies was at 93.765, effectively unchanged from late Tuesday but down over half a percent since the end of last week.

On Tuesday, fresh data had pointed to a further cooling-off in the U.S. housing market, with building permits and housing starts both falling. That came on top of industrial production data on Monday that showed U.S. factories increasingly struggling with supply chain issues.

As a result, investors have trimmed expectations of an interest rate hike by the Federal Reserve next year, having started to put some punchy bets on such a move in previous weeks.

The dollar has weakened in the last two days particularly against currencies where near-term interest rate hikes are more of a certainty. It lost another 0.1% against the New Zealand dollar to $1.3952, although it bounced by a modest 0.1% against sterling to trade at $1.3779.

Sterling failed to get any support from September inflation data released earlier, which showed a slowdown in monthly rates of both consumer and producer prices. The annual consumer price index came in a 3.1%, rather than the 3.2% expected.

The euro, by contrast, received more of a boost from another sharp rise in German producer prices, which added to suspicions that the European Central Bank is starting to fall behind the curve with regard to inflation.

Germany’s PPI rose by 2.5% on the month, and by 14.2% on the year, its fastest increase in over 10 years. Oliver Rakau of Oxford Economics pointed out, however, that by far the greatest component of the increase was energy prices, and noted that the monthly pace of core price increases was slowing.

In Asia, the dollar had enjoyed another strong session against the yen, where expectations of relative near-term interest rate dynamics are still in the dollar’s favor. The greenback hit a four-year high of 114.71 before retracing a little.

In China, it managed a modest bounce against the yuan after falling to its lowest in over four months on Tuesday. The People’s Bank of China kept its prime loan rate unchanged at a regular policy meeting earlier, having also chosen not to cut its reserve requirement ratio last week.

Dollar Steady After Weak Data Trim Rate Hike Expectations
 

Related Articles

Add a Comment

Comment Guidelines

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.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Dale Wyffels
Dale Wyffels Oct 20, 2021 5:38AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
how can the dollar be higher after flooding the markets with trillions?? how? don't believe the news print, all bs. see you in a bread line soon. OMG
Rodney Dangerfield
Rodney Dangerfield Oct 20, 2021 4:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I wonder what the feather pin and gold inkwell on USD $100 bill means?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
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
Continue with Google
or
Sign up with Email