The dollar pulls back, weighed down by the US economic slowdown

Around 9 p.m., the dollar gave up 0.12% to 0.8610 euro to the dollar.

The US dollar retreated Monday after parading early in the day, battered by a poor indicator that confirmed the slowdown in growth in the United States.

Around 6:55 p.m. GMT, the dollar gave up 0.12% to 0.8610 euro to the dollar.

The greenback had initially benefited from a disappointing growth figure for the third quarter in China (4.9% over one year against 5% expected) to put on its safe haven suit and advance against the euro.

The Dollar Index, which measures the evolution of the “greenback” against a basket of currencies (in which the euro weighs 58%) rose to 94.17 points, regaining color after a difficult weekend.

But the news that industrial production fell 1.3% in September in the United States, when analysts expected a slight increase of 0.2% from August, changed the mood of forex traders, who turned around. diverted from the dollar.

The easing of US bond rates, with a ten-year yield on government bonds dropping from 1.62% to 1.58%, contributed to this turnaround, explains Kathy Lien, director of foreign exchange strategy at BK Asset Management .

A too marked slowdown in the US economy would reduce the likelihood of a hike in key rates by the US Central Bank (Fed), which would deprive the world’s largest currency of the support that has allowed it to reposition itself against major currencies since the end of summer.

At the start of the day, the futures contracts based on the level of the Fed’s key rates, the Fed Funds Futures, incorporated, for the first time with certainty since the start of the pandemic, the scenario of a double hike by December 2022.

But thanks to the events of Monday, they were not counting, at the end of the day, on a single certain increase by the end of next year.

In the absence of leading macroeconomic indicators in the coming days, the euro and dollar should move within a narrow range in the near term, pending the publication of the Eurozone activity indices (PMI) for October, Friday, which will be very followed.

“This could allow the euro to break through” in the event of favorable figures, warned Kathy Lien.

Elsewhere in the currency market, each day its record for the Turkish lira, which hit a new all-time low against the dollar on Monday, at 9.3356 pounds to the dollar.

The Central Bank of Turkey’s monetary policy committee is due to release its monthly statement on Thursday and “investors are bracing for another rate cut,” which would further undermine the Turkish currency, Matt Weller said in a note. , Head of Research at Forex.com.

In terms of cryptocurrencies, bitcoin remained at a very high level ($ 61,837) after briefly crossing $ 62,000. Electronic currency could attack its all-time high on Tuesday after the start of listing on Wall Street of the first US index fund (ETF) indexed to bitcoin.

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