Strong rise of the US Dollar, what's next !
The dollar index rose on Wednesday above 108.5, as it is trying to reach its highest levels this year, supported by rising Treasury bond yields, as well as strong US economic data released yesterday, and these data reduced the likelihood of further interest rate cuts by the Fed.
The dollar is also supported after hawkish comments from Richmond Fed President Parkin when he said that if price pressures continue, the Fed will have to be tougher with interest rates.
There is also a discussion now about whether they will reduce or maybe raise The narrative has changed dramatically, resulting in what may be an even greater strength of the dollar.
Growth in the US services sector accelerated in December, boosting business activity and pushing prices to their highest levels since early 2023.
Employment also increased by 259 thousand jobs to 8.098 million in November, exceeding expectations and reaching a 6-month high.
Investors are now focused on the monthly jobs report on Friday, one of the last major data releases before the next monetary policy decision by the Fed.
USDJPY
The yen touched the level of 158.42, which is its weakest level against the dollar for almost six months.
Japanese Finance Minister Katsunobu Kato also warned against speculative selling of the yen the day before as the exchange rate is approaching the 160 level that attracted the sale of the dollar half a year ago.
EURUSD
The euro fell by about 0.5% overnight after the positive dollar data,and the British pound also fell.
AUDUSD
The Australian dollar fell strongly, becoming not far from breaking its 2022 low at 0.6170 dollars.
Australian monthly inflation data showed the main consumer price index rose from three-year lows in November, although low core inflation strengthened the case for cutting interest rates.
NZDUSD
After losing more than 11% against the US dollar last year, the New Zealand dollar has stabilized At 0.5634 dollars on Wednesday, which is not far from the two-year low of 0.5588 dollars, which was recorded in late December.
