Fed indicators and comments blow at the back of the dollar

Shortly before 9 p.m., the single European currency dropped 0.42% to 1.1200 dollars for one euro. It had sagged to $ 1.1186 earlier Wednesday, for the first time since 1is July 2020.

A series of indicators that painted an overall positive image of the US economy as well as the firm words of a member of the US Central Bank (Fed) carried the dollar even further against the euro on Wednesday.

Around 7.50 p.m. GMT, the single European currency dropped 0.42% to 1.1200 dollars for one euro. It had sagged to $ 1.1186 earlier Wednesday, for the first time since 1is July 2020.

If the euro is particularly targeted by currency traders, the pound sterling has reached, against the greenback, an 11-month low and the Swiss franc almost 8 months.

As for the yen, it has remained firmly established above the 115 yen dollar, with a peak, still Wednesday, at 115.51, a threshold more frequented for almost five years (January 19, 2017).

Already supported for two days by the renewal of the presidency of the Fed of Jerome Powell by US President Joe Biden, the “greenback” benefited Wednesday from a series of macroeconomic indicators “generally positive”, according to Juan Manuel Herrera, Currency Specialist at Scotiabank.

Among the figures released on Wednesday, the weekly jobless claims stand out, the lowest in 52 years, as well as the 1.3% increase in household spending in October, against 0.6% in September.

Even though the second estimate of GDP growth for the third quarter, below expectations at 2.1%, confirmed a slowdown, these economic data “point to an economy which continues to move in the right direction”, commented, in a note, Edward Moya, Oanda analyst.

This trajectory as well as the persistence of inflation, again confirmed on Wednesday by the PCE price index (5% over one year), considered as a benchmark by the Fed, convinced that the Federal Reserve will hasten the normalization of its policy. monetary.

According to the minutes (minutes) of the last meeting of the Fed’s Monetary Policy Committee, released on Wednesday, several members considered the possibility of an early end of asset purchases and an earlier rate hike. planned.

The Fed’s San Francisco chairman, Mary Daly, on Wednesday said she was publicly open to the prospect in case inflation persisted.

“She is usually quite accommodating (in monetary terms) and she has been more firm today,” said Juan Manuel Herrera.

Faced with a euro zone worried about the resurgence of the pandemic, of which the central bank is not showing the slightest sign of monetary inflection, and with a recovery at a still uncertain pace, the dollar is not meeting any opposition.

“Between now and 1.10 (dollar for one euro), there is not much to stop the decline of the euro,” warns the analyst from Scotiabank.

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