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© Reuters.
By Peter Nurse
Investing.com – The US dollar fell in early European trading on Friday, holding around seven-month lows amid concerns over a possible US economic slowdown, while sterling fell on weak sales data retailers.
As of 03:15 ET (08:15 GMT), the , which tracks the greenback’s performance against six other currencies, was down 0.1% at 101,750, just above a seven-month low of 101. .51 recorded on Wednesday.
The index is down a further 1.3% this year, after heavy losses in the last quarter of 2022, as investors bet the Federal Reserve will slow the pace of interest rate hikes on signs that seem to show that inflation has peaked.
At the same time, data reported by the US this week suggested that the world’s largest economy was slowing, due to a fall in retail sales of 1.1% per month in December, a drop in industrial production of 0.7% and a drop in manufacturing production of 1.3%.
“This is the third consecutive month in which there has been a contraction in industrial activity, and the decline in production seems widespread,” the ING (AS:) analysts said in a note. “Following weak retail sales, a sharp drop in industrial production and news of more layoffs add to fears that the US may already be in recession.”
Elsewhere, the pair fell 0.1% to 1.2372 after UK retail sales unexpectedly dipped 1% in December, much weaker than the 0.5% monthly gain seen foresaw.
“Retail sales fell again in December, suggesting that consumers reduced the amount of Christmas shopping due to concerns about affordability,” said Heather Bovill, Deputy Director of Surveys and Economic Indicators at the UK’s Office for National Statistics. .
The pair rose 0.2% to 1.0850, reaching levels not seen since the beginning of April 2022. The president of the European Central Bank, Christine Lagarde, warned on Thursday at the World Economic Forum in Davos (Switzerland) that the inflation figures were still “too high”, thus reiterating the need to take more aggressive measures in terms of monetary policy.
The pair rose 0.3% to 128.81 after Japan’s core CPI rose 4.0% in December from a year earlier, double the central bank’s 2% target.
The yen has been quite volatile lately on expectations that the Bank of Japan will end its ultra-easy monetary policy in the near future.
The pair was up 0.5% to 0.6945, the pair was also up 0.6% to 0.6439, while the was down 0.1% to 6.7705. Furthermore, the yuan will lose 1.3% this week as the rise in COVID-19 cases in China has cast doubt on China’s near-term economic prospects.
On Friday, the People’s Bank of China kept its benchmark lending rate at record lows for the fifth straight month.
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