The dollar worked without a single sign against the major currencies, ending a week of intense interest in central bank positions. The greenback advanced against major European currencies, but fell against the yen, as investors focused on the Bank of Japan’s (BoJ, abbreviated English) latest monetary policy decision for the year, which will take place next week. In this scenario, the prospects for 2023 are starting to gain more space.
By late afternoon, the dollar had fallen to 136.58 yen. On the other hand, the euro fell to $1.0602 and the pound fell to $1.2175. DXY rose 0.14%.
After a volatile few days in financial markets, the dollar is ending the week slightly stronger against most other major currencies as risk sentiment worsened sharply after the latest round of central bank meetings, Capital Economics estimates. “We believe this will provide an end to a correction that has seen the DXY down nearly 10% since its peak in late September.”
In the UK, the country’s retail sales suffered an unexpected 0.4% decline in November compared to October, when analysts had expected a 0.4% rise, adding pressure on the pound. Also, for Convera, the tone of yesterday’s BoE decision took on a dovish note as some central bankers voted to keep interest rates at 3% due to the dismal outlook for the world’s sixth largest economy.
The analysis suggests that “the euro dominated the week” reaching 6-month highs after the European Central Bank (ECB) raised interest rates by 50 basis points to 2%, and its aggressive guidance suggests rates could peak much higher. . Recent estimates are down 3%. “The ECB appears to be on a path of tighter interest rates next year than the Federal Reserve (Fed) is proposing as well as potentially bullish euro.”
