The dollar is ahead of wages; German retail sales on the rise According to Investing.com
Investing.com – The U.S. dollar traded flat on Thursday, as traders digested mixed economic data ahead of the week’s most-watched earnings report.
At 05:35 ET (09:35 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, rose just above 103.917, after reaching its highest since late July on Tuesday.
The dollar steadies
The dollar is struggling to outperform, after recent gains, as recent economic readings have proved difficult to read in terms of showing the strength of the US economy.
The US expanded in October, data showed on Wednesday, but this followed a slower-than-expected drop in September, falling to the lowest level since January 2021.
Additionally, the data showed that it grew at an annual rate of 2.8% in the third quarter, slightly below the 3% expected by economists.
Thursday’s slate of economic data includes weekly and the deflator, the Fed’s preferred price gauge, but most eyes will be on Friday.
Also of interest was the run-up to Tuesday’s presidential election, with dollar trading favoring Republican Donald Trump to win, although the race with Vice President Kamala Harris appears to be very close.
DXY is currently close to support at 104.00, ING said, “and after more than a month of one-way traffic, it may be due for a modest correction to the 103.65 area.”
German retail sales are rising
In Europe, it traded unchanged at 1.0857, after unexpectedly rising in September, it gained 1.2% compared to the previous month.
This followed data showing growth of 0.2% in the third quarter from three months ago, ahead of expectations.
However, the European Central Bank is still expected to continue reducing interest rates, especially if, due to the latest in the program, it remains below the 2.0% target of the central bank.
Inzalo has cut interest rates three times this year, with the latest cut at its last meeting in October, the first rate cut back since the euro crisis in 2011.
“EUR/USD could retest yesterday’s 1.0870 on today’s European data – but a rise to 1.09030 may be a bridge too far given the crucial US election next Tuesday,” ING added.
rose 0.1% to 1.2976, after Wednesday’s UK budget, the first of the new Labor Government.
“Labor’s big tax-and-spend budget – described by some as ‘old Labor policy’ – is being reviewed across UK asset markets,” notes ING. “Sterling received a brief boost yesterday on the view that the budget is encouraging and that the Bank of England’s tapering cycle will require a return to higher rates.” .”
“However … we suspect the BoE is unlikely to interfere with the government’s budget plans.”
The BOJ is keeping interest rates at low levels
fell 0.6% to 152.47, with the yen gaining even after interest rates were kept at record lows early Thursday.
BOJ Governor Kazuo Ueda stressed the need to closely monitor global economic developments in deciding when to tighten policy next, highlighting its focus on the risks of a weak domestic recovery.
“Regarding the timing of the next rate hike, we do not have a set view. We will consider the information available at that time in each policy meeting, and update our view on the economy and our approach, in determining policy,” he said.
rose 0.1% to 7.1192, after the release of China, which showed employment in October increased for the first time in six months.
The official PMI rose to 50.1 in October from 49.8 in September, just over the 50-point margin of growth since contraction.
