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Current dollar rate as of today: The dollar is rising against the euro and the pound, slightly falling against the yen

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current dollar rate as of today

Current dollar rate as of today: The dollar is moderately strengthening against the euro and pound sterling. but slightly declining against the Japanese yen after the publication of macroeconomic data from China.

As it became known on Monday, growth in retail sales and industrial production in China in July was weaker than analysts’ forecasts. Retail sales rose 2.7% year-on-year instead of the expected 5% growth, and industrial production growth in China slowed down to 3.8% last month from 3.9% in June, although the analysts’ consensus forecast for the indicator was a 4.6% rise.

U.S. current dollar rate – What’s happening in the market? 

Worse-than-expected, statistical data has increased the demand for protective assets, including the yen (to a larger extent) and the dollar.

The People’s Bank of China injected 400 billion yuan (almost $60 billion) into the financial system as part of its medium-term lending program (MLF) to support the Chinese economy, and cut the rate on one-year MLF loans by 10 basis points to 2.75% per year.

The so-called offshore yuan (traded outside mainland China) fell 0.5% to 6.7738 yuan/$1 in Hong Kong amid the easing of monetary policy.

Other important events for world markets this week will be the publication of the minutes of the Federal Reserve’s meeting in July on Wednesday and the report on U.S. retail sales on Friday, says Trading Economics.

The euro fell 0.2% to $1.0238 against the dollar, down from $1.0259 at market close last Friday. The pound fell by 0.38% to $1.2092 from $1.2138 at the close of the previous session.

In pair with the yen, the rate of the American currency is 133.38 yen against 133.42 yen on Friday, dropping by 0.2%.

The ICE index showing the dollar’s movement against six currencies (euro, Swiss franc, yen, Canadian dollar, British pound and Swedish krona) was up 0.18% in trading. The broader WSJ Dollar Index adds 0.15%.

We previously reported that markets get restless ahead of the weekend

Forex

Japanese yen subdued despite BOJ deputy governor’s rate hike hint

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Investing.com– The Japanese yen exhibited minimal movement on Tuesday, despite Bank of Japan (BOJ) Deputy Governor Ryozo Himino indicating a potential hike in the upcoming policy meeting.

Himino suggested that the central bank might consider raising rates, citing sustained wage growth and expectations of a clearer U.S. policy landscape following President-elect Donald Trump’s inaugural address later this month.

The yen’s pair edged 0.1% higher to 157.62 yen on Tuesday.

In recent months, the BOJ has been adjusting its monetary policy to address rising inflation. In March last year, it ended its negative interest rate policy, and by July, it had increased the short-term policy rate to 0.25%.

These measures aim to achieve a stable 2% inflation target, supported by robust wage growth and a weakening yen, which have contributed to higher import costs.

Despite these developments, the yen’s exchange rate against the U.S. dollar remained relatively stable, reflecting market skepticism about the likelihood of an imminent rate hike.

Analysts suggest that while the BOJ is signaling a shift towards policy normalization, uncertainties surrounding global economic conditions and domestic wage dynamics may lead to a cautious approach.

Barclays (LON:) expects the central bank to implement rate hikes in March and October, with a terminal rate of 0.75%.

The BOJ’s next policy meeting is scheduled for January 23-24, where new growth and price projections will be discussed.

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UBS notes hedge funds sell GBP amid UK fiscal worries

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US dollar to stay stronger for longer, UBS says

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Investing.com — UBS strategists expect the US dollar “to stay stronger for longer,” citing robust US economic activity and ongoing tariff concerns impacting other regions.

Monday saw the (DXY) soar to its highest level since November 2022, trading above the 110 mark during the session. This represents a roughly 9% appreciation since late September.

The US dollar’s recent strength has been bolstered by better-than-expected domestic data, including nonfarm payrolls and the services sector purchasing managers’ index. These positive indicators have led to a decrease in the anticipated number of Federal Reserve rate cuts this year, with the consequent rise in US yields lending broad support to the USD.

While US economic data is expected to remain solid in the near term, the outlook for Europe is less optimistic, with subdued growth prospects.

Although growth in China is forecasted to accelerate to 5% year-over-year for the fourth quarter, the threat of US tariffs poses a significant risk. Political and economic uncertainties in South Korea, the European Union, and the UK have been linked to weakness in their respective currencies.

According to UBS, potential monetary policy divergence is among the key factors that could further propel the dollar upward in the near term.

While the Fed is expected to cut rates by a total of 50 basis points in the second and third quarters, the European Central Bank is projected to reduce rates by 100 basis points in the first half of the year.

“Policy divergence is a powerful driver of currencies, which leads to trending FX markets and the potential for overshooting exchange rates,” strategists led by Mark Haefele wrote.

The firm also points out that tariff risks may not be fully accounted for in the current USD valuation. Despite the dollar’s recent rally being largely attributed to solid US macroeconomic data, the introduction of new tariffs could drive the dollar even higher.

UBS suggests that if tariffs are implemented, the DXY could trade between 110 and 115, with significant impacts on other major currency pairs.

“If tariffs were to materialize, DXY could trade in a 110-115 range, could drop below parity, could slide below 1.20, and could move toward 0.94, in our view,” strategists noted. 

However, the investment bank believes that the story of 2025 could be a tale of two halves, with the dollar strength in the first half of the year potentially reversing in the second half.

The current trading position of the USD, which is considered strongly overvalued and shows the highest level of dollar net length since 2015, supports this view.

UBS’s revised forecasts for the EUR/USD pair reflect this expected trajectory. Strategists expect the pair to trade at 1.00 in March, 1.02 in June, and 1.06 in December 2025.

In the case of China, despite the possibility of dramatically higher effective tariff rates, the CNY has only partially priced in this risk, with UBS reiterating its forecast for the to reach 7.50 by June.

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