On Thursday, a strong dollar drove the yen to a 10-month low and kept the euro and sterling stuck near three-month lows as investors continued to have faith in the still-resilient U.S. economy despite a gloomy prognosis for global growth. In early Asian trading, the dollar reached a new high of 147.865 yen, its highest …
On Thursday, a strong dollar drove the yen to a 10-month low and kept the euro and sterling stuck near three-month lows as investors continued to have faith in the still-resilient U.S. economy despite a gloomy prognosis for global growth. In early Asian trading, the dollar reached a new high of 147.865 yen, its highest level since late November. The dollar was recently 0.05% higher against a basket of currencies at 104.91, maintaining some of its gains from the previous session after reaching a six-month high on the news that the U.S. services sector unexpectedly picked up in August. The euro fell to $1.0703 on Wednesday, its lowest level since June, due to the stronger-than-anticipated report, and it last traded 0.03% lower at $1.0723. Similar to other currencies, sterling fell 0.07% to $1.24985, having hit a three-month low of $1.24835 the previous day. “It certainly was a good (ISM)… so those thinking of a (U.S.) recession in the near term might be a little bit disappointed,” said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia (OTC:CMWAY) (CBA).
The Beige Book, on the other hand, “wasn’t that great, actually.” According to the Federal Reserve report released on Wednesday, recent U.S. economic growth has been “modest,” job growth has been “subdued,” and inflation has declined in most regions of the nation. “I believe that what’s really driving the dollar is not so much how well the American economy is doing, but how well it is doing compared to other economies.” According to the CME FedWatch tool, market pricing indicates a close to 47% possibility that the Fed will raise rates again in November, despite expectations that they will hold rates steady later in the month.
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