The dollar was volatile today but remained on a bullish trajectory overall supported by traders’ confidence in the resilience of the US economy which was reinforced by the stronger-than-expected PMI data.
Additionally, Federal Reserve members maintained a hawkish stance, emphasizing the necessity of keeping interest rates elevated for an extended period. This helped keep yields near this year’s peak which could continue to support the dollar.
Conversely, the euro faces mounting selling pressure as traders factor in the end of the current tightening cycle. Economic data, particularly for Germany, indicates a deterioration in the economic situation.
The British pound remains weak due to heightened concerns about an impending recession in the UK. If they remain elevated, current interest rates could also weigh on the economy and on the value of the pound.
The yen remains near the historical 150 level against the Dollar as the Bank of Japan maintains its monetary easing policy in contrast to tighter policies in other developed economies.
At the same time, the pair could continue to linger near current levels as market participants remain cautious in the face of a potential intervention of the Bank of Japan.
The Australian dollar has faced selling pressure following the Reserve Bank of Australia’s decision to keep rates unchanged. The assessment of economic growth below trend levels and inflation impacting household consumption have contributed to this pressure.
Additionally, the struggles of the Chinese economy, Australia’s largest trading partner, further dampened sentiment toward the currency.
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