The American dollar rate today is falling against the euro and the pound, and rising against the Japanese currency. The yen weakening comes against the background of the Bank of Japan maintaining a soft monetary policy, while other central banks around the world have begun to tighten it because of the inflation rate, breaking multi-year records. In total, the yen has lost 21% since the beginning of the year.
“The yen is at risk of further depreciation as long as the Bank of Japan’s control of the yield curve remains status quo and other central banks, including the Fed, continue to tighten or normalize policy,” said Oversea-Chinese Banking Corp. strategist Christopher Wong.
Meanwhile, the ICE-calculated index showing current dollar rate movements against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona) is down 0.27%, while the broader WSJ Dollar is down 0.29%.
The euro rose 0.19% to $0.9821 against the dollar, up from $0.9802 at the close of Friday’s session. The pound rose 0.8% to $1.1259 from $1.1170 at the close of the previous session.
The U.S. currency gained 0.10 percent against the yen to 144.88 yen from 144.74 yen on Friday. During the session, the yen was falling below 145 yen per $1, which could provoke the Japanese government to carry out a currency intervention for the second time this year.
The Japanese currency fell to 145.9 yen per dollar on September 22, after which the Ministry of Finance decided to intervene in the currency market for the first time in 24 years. The authorities spent a total of 2.84 trillion yen ($19.65 billion) in September to support the national currency, according to the ministry.
Earlier we reported that the dollar is losing value against the euro and the yen.
Inflation rate in the eurozone is close to a peak – ECB chief economist
Inflation rates in the eurozone are close to a peak, said Philip Lane, chief economist at the European Central Bank (ECB).
“It is too early to conclude that inflation has peaked, but I can say with confidence that we are close to peaking,” Lane told Italian newspaper Milano Finanza.
“We expect that further interest rate hikes will be needed, but we have already done a lot,” Lane said. – The starting point is different now, given that rates have already been raised by 200 basis points (bps). We will consider the scale of what has already been done.
Euro inflation rate forecast
The ECB raised all three key interest rates by 75 bps at its October meeting. The benchmark lending rate was raised to 2%, the deposit rate to 1.5% and the rate on margin loans to 2.25%. Since July this year, the ECB has raised key rates by 200 bps.
Experts expect that in December the rate on loans will be raised to at least 2% from 1.5%. Today it is worth noting that in the Euro / U.S. Dollar pair the European currency started to strengthen a bit.
According to preliminary data from the Statistical Office of the European Union, inflation in the Eurozone slowed to 10% y/y in November from 10.6% in October. A decrease in the growth rate of consumer prices was recorded for the first time in 1.5 years. According to Lane, an acceleration in inflation in early 2023 cannot be ruled out.
“After the first few months are over, in the spring or summer, we are likely to see a major slowdown in inflation. However, it will take time for it to slow down to the ECB’s 2% target,” Lane said.
Asked whether inflation could slow to 6-7% in 2023, he said that “initial easing as a result of rate hikes will bring the rate of price growth to about that level,” and the slowdown will continue thereafter.
Earlier we reported that the Eurozone unemployment rate fell to 6.5% in October and the EU unemployment rate fell to 6.0%.
Eurozone annual inflation rate slowed to 10% in November
Eurozone inflation rate rose 10% now. Inflation has slowed down from 10.6% in October, when the rate was at its highest since the start of calculations. Analysts polled by Trading Economics had expected inflation to slow to 10.4 percent.
Eurostat Eurozone inflation – current data
Consumer prices declined by 0.1% compared to the previous month. Consumer prices excluding volatile factors such as energy, food and alcohol (CPI Core Index tracked by the ECB) rose 5% year-on-year in October after rising the same amount in October.
Energy prices slowed to 34.9% in November after rising 41.5% in October. Manufactured goods prices rose 6.1%, the same as a month earlier. The U.S. is about the same, putting pressure on stock markets and even Apple stock prices today.
The cost of food, alcohol and tobacco products rose 13.6% after an increase of 13.1% in October. Services rose 4.2% (+4.3% a month earlier).
The highest inflation in annual terms was recorded in Latvia (21.7%), Estonia, and Lithuania (21.4%). The lowest price growth was observed in Spain (6.6%), France (7.1%) and Malta (7.2%).
Earlier we reported that the dollar is getting cheaper against major currencies.
Dollar is getting weaker against major currencies
The dollar is getting weaker against major currencies in trading Thursday morning after U.S. Federal Reserve (Fed) Chairman Jerome Powell spoke the day before.
During a speech at the Brookings Institution on Wednesday, Powell reiterated that the Fed could slow the rise in the benchmark rate as early as December. “The time to moderate the pace of rate hikes may come as early as the next meeting,” Powell said.
The Fed chair, meanwhile, tried to balance those words with “hawkish” signals. Market Watch notes. He said that the U.S. Central Bank will have to raise the rate higher than could be expected a few months ago. Also, Powell made it clear that the issue of rate cuts is irrelevant at the moment. Against this background, the stock market and Tesla stock prices today in particular rose.
Another Fed official, Board of Governors member Lisa Cook, is confident that the regulator needs to keep raising the rate because inflation is still too high. “We’ve started to get more favorable inflation data. But I would be cautious about drawing big conclusions on just one month’s worth of data,” Cook said during a speech at the Detroit Economic Club.
Is the dollar going to crash? It’s premature to make such statements. So far, the euro has gained 0.36% against the dollar to $1.0443 against $1.0406 at the close of the session on Wednesday. The dollar/yen exchange rate declined 1.14% to 136.50 yen from 138.07 yen at the end of the previous session. The pound gained 0.31% to $1.2095against $1.2058 the day before.
The ICE-calculated index showing the dynamics of the US dollar against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona) is down 0.4%, while the broader WSJ Dollar Index is losing 0.6%.
Earlier we reported that unemployment in the Eurozone fell to 6.5% in October and in the EU to 6.0%.
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