Weekly Roundup: US dollar fluctuates amid mixed trade
Amy Richards January 30th 2023 - < 1 minute read
The US dollar wavered in a narrow range on Monday, as a risk-on market mood pressured the safe-haven ‘greenback’ while rising US Treasury yields lent it some support. This set the tone for the remainder of the week, with the US dollar fluctuating but moving sideways overall.
A cautious mood on Tuesday initially lifted USD, but stronger US PMI reports in the afternoon cheered markets, thereby denting the dollar, while thin trading conditions on Wednesday added to the lack of movement.
Stronger-than-expected US GDP and durable goods orders on Thursday triggered a spike in the ‘greenback’, but USD failed to hold its gains as a risk-on mood once again swept markets.
The choppy trade continued through to the end of the week. The US core PCE price index showed an uptick month over month, which could have boosted Federal Reserve rate bets. However, a fall in personal spending offset these expectations.
The Fed also meets to set interest rates this week. Forecasts are split, but the consensus among economists is that the US central bank will raise rates by just 0.25%. Such a small hike could spark a selloff in USD.
The week ends with some high-impact US data, including non-farm payrolls and the ISM non-manufacturing PMI. An expected slowdown in US hiring activity may dampen the US dollar’s appeal, while a recovery in service sector activity may boost USD.