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The American “Wall Street Journal” newspaper reported, on Sunday, that a series of conflicting economic data caused the US dollar to decline; Which led to the halt of its continuous rise in its economic and financial value.
In a report on its website, the newspaper indicated that the US dollar index – which estimates the value of the dollar against 16 other currencies – showed that its value during the month of May decreased by 2% from its maximum value reached during this month in the past years, as its value decreased by 1.1% in the last month only.
The newspaper added that this decline broke a steady march of the dollar’s value that had made it to its highest levels for decades, pointing out that during the past week, the dollar index rose by 0.6%, ending the period of consecutive losses for the dollar that lasted for two weeks.
Behind this decline, there has been a slight shift in the US economic landscape, as American consumers are still spending money at a rapid pace, while employers continue to add new jobs; This extends the trends that have helped lift the dollar over the past 12 months.
However, signs of weakness have emerged in other economic regions, where wage growth has slowed since last year, consumers are only able to sustain their spending by saving, and the US service sector – which includes restaurants and travel – slowed the pace of expansion in May. New home sales in April recorded their biggest decline in 9 years.
The newspaper pointed out that these changes in the data clouded the expectations of some asset managers regarding the American economy, as they became concerned that the Federal Reserve would have to slow the pace of expected increases in interest rates, a decision that stock investors may welcome, but it will mean that currency markets will become more foggy. .
The newspaper pointed out that the US Federal Reserve is expected to raise interest rates by 1% during June and July, but it is difficult to predict the resulting events, pointing out that traders currently consider the dollar more sensitive than usual to new economic decisions.