Euro hovers near one-year high as U.S. outlook clouds over | Inquirer Business

Euro hovers near one-year high as U.S. outlook clouds over

/ 05:15 PM April 27, 2023

LONDON/TOKYO – The euro hovered near a one-year high against the dollar on Thursday, as Europe’s resilient economy contrasted with banking risks and the debt ceiling standoff in the United States.

It was last up 0.08 percent against the dollar at $1.104, not far off yesterday’s one-year peak of $1.1096.

The dollar index – which measures the greenback against six major peers – was flat at 101.41. That followed a 0.39- percent slide the previous day.

Article continues after this advertisement

Britain’s pound and Japan’s yen were little changed.

FEATURED STORIES

“We’re looking for potentially a bit more of a challenging environment for the U.S. dollar, which people have already started to position for,” said Carl Hammer, chief strategist at European lender SEB.

“We have the debt ceiling coming up and U.S. inflation moderating a few months before the euro zone.”

Article continues after this advertisement

The greenback has fallen more than 11 percent since hitting a 20-year high in September. Analysts say it has been driven by a drop in U.S. inflation, the impending end of the Federal Reserve’s rate-hiking cycle, and Europe’s outperformance.

Article continues after this advertisement

Germany again revised up growth forecasts on Wednesday, and a survey showed a continued pickup in consumer confidence.

Article continues after this advertisement

By contrast, U.S. capital goods spending fell more than expected in the latest data overnight, adding to jitters about a downturn.

The mood was not helped by First Republic Bank’s continued slump, or the ongoing wrangling over an extension to the U.S. debt ceiling.

Article continues after this advertisement

Traders will look closely at the U.S. gross domestic product figures for the first quarter, due out later on Thursday, for any signs of a slowdown.

Elsewhere in currency markets, the yen was in a holding pattern as the Bank of Japan began a two-day policy meeting, the first under new governor Kazuo Ueda. The dollar was up 0.08 percent at 133.79 yen.

The market consensus is that Ueda will leave ultra-easy policy settings unchanged on Friday, but no one is willing to rule out another surprise like the shock doubling of the 10-year bond yield band in December.

Sterling was flat at $1.247, retaining Wednesday’s 0.48 percent advance.

The euro was flat against Sweden’s krona at 11.398, having rallied 0.79 percent on Wednesday after the Swedish central bank was less hawkish on inflation than expected.

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

Australia’s dollar was up 0.23 percent at $0.662.

TAGS: Banking, dollar, economy, Euro, Europe, Europe's economy, Forex, risks

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our newsletter!

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

© Copyright 1997-2024 INQUIRER.net | All Rights Reserved

This is an information message

We use cookies to enhance your experience. By continuing, you agree to our use of cookies. Learn more here.