Dollar Expects Week To End On A Bearish Note While Euro Heads For Higher Gains
The trading value of the greenback has become weaker in the Friday trading session. Surprisingly for many, the trading value of the dollar has continued declining throughout the week.
The analysts are expecting that the trading value of the dollar has been moving in the negative path for an entire week.
The reason behind the lack of support for the dollar is the lack of certainty involving the currency.
The uncertainty is mainly because of the Feds and their decision about the interest rates. It is a big concern among investors as to how the Federal Reserve wants to deal with the surging interest rates.
There are strong speculations that the inflation rates may continue rising and the Feds will need to tighten the monetary policy. This will only make the dollar gain strength but the decision is still in process.
The Feds are yet to decide and confirm if they want to change their stance against the rising inflation rates or not.
With this in mind, the investors have stopped themselves from making any more investments in the dollar. There are strong speculations about the interest rate hikes but the Feds may have something else in mind.
Performance of Dollar Price Index (DXY)
The dollar price index has been performing badly because of the decision of the investors. The latest trend shows that the price index for the dollar is moving down by 0.2%.
After the decline, the value of the dollar against the basket of the major currencies has steered down to 104.782,
This is very alarming for the investors who had a strong faith in the upward movement of the dollar. Investors are finding it difficult to digest that the trading price of the dollar has fallen to such a lower level.
Just as the running week began, the trading price of the dollar was at a high of 105.36 against the major currencies. This was the two-month high figure that the dollar price had hit against the major currencies.
As the week comes to an end, the dollar price index would have fallen at a higher rate. According to the figures from the forex market, the dollar price index may be at a 0.4% decline by the end of the month.
According to the statistics, this would be the first week since January when the dollar price index would have ended on a negative note.
Comments Coming in from the Feds
For now, there are strong suggestions that the Feds may stick with their decision of staying modest with their monetary tightening of the interest rates.
The same suggestion has come from Raphael Bostic, the Federal Reserve President of Atlanta. Bostic stated that he wanted to go for slow and steady increases when it came to hiking the interest rates.
He suggested that it would be much more favorable for the Feds if they increase the interest rates by 25 bps by the end of this month.
He stated that the impact of higher interest rate increases may start showing their outcome by the beginning of spring.
Performance of Other Currencies against the Dollar
The data shows that the trading price of the dollar has dropped against the euro. The euro price has surged by 0.2% in the latest trading session against the greenback.
This is for the first time in two months that the trading price of the euro has performed so well against the dollar.
The sterling price has witnessed a significant push against the dollar price. It has reportedly surged by 0.3% against the trading price of the dollar. Following the push, the sterling price has been pushed up to 1.1980 against the dollar.
The dollar has declined in value against the Japanese yen, recording a 0.2% dip. The value of the yen against the dollar is now 136.47.
The trading prices of the NZD, the AUD, and the CNY have all surged by 0.2%, 0.3%, and 0.2% against the dollar in the latest sessions.