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© Reuters.
By Peter Nurse
Investing.com – The dollar loses positions at the start of trading in Europe on Wednesday, approaching three-week lows, as traders react to a further weakening in the US economy, as well as likely intervention in Asia. .
At 08:55 AM ET, the , which tracks this currency against a basket of six other majors, was down 0.2% at 110.638, just above intraday lows on 110.612, its lowest level since October 5.
The latest US economic data, released on Tuesday, indicates that the US slumped in August as rising mortgage interest rates weighed on demand.
Following Monday’s showing that US business activity contracted for the fourth month in a row, signs are mounting that the Federal Reserve’s aggressive rate hikes are already having a detrimental impact on the world’s largest economy.
Everything points to another hike of 75 basis points next Wednesday, but it is increasingly likely that the new increases will be of a smaller magnitude.
On the contrary, the is expected to keep its monetary policy unchanged, which has strongly affected the yen.
The pair is largely unchanged at 147.94, having broken above the 150 level, which triggered a so-called Bank of Japan intervention on Friday and Monday.
That said, it appears that the Chinese authorities have also joined the intervention club, with the pair dipping 0.5% to the 7.2690 level, and Reuters reporting that several Chinese state-owned banks sold dollars during on Tuesday to underpin the weakening yuan.
Concerns over China’s political climate sent the yuan falling sharply this week, as Beijing has reiterated its commitment to stick to its strict zero-Covid policy, while the country’s third-quarter GDP data disappointed.
Elsewhere, the pair is up 0.2% to the 1.1486 level, continuing to benefit from the appointment of Rishi Sunak as British leader, replacing Liz Truss, given his apparent fiscal prudence.
The pair is up 0.2% to 0.9979, near six-week highs, buoyed by French consumer confidence rising to 82 in October, beating the previous month’s reading of 79. .
He will publish his monetary policy decision on Thursday and is expected to raise rates by 75 basis points.
The pair is up 0.6% to 0.6432, its highest level since Oct 7, after positive figures from earlier in the week increased pressure on the pair to maintain an aggressive monetary stance. at its meeting next week, and the is up 0.4% at 0.5775.
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