As Traders Wait For US GDP Figures, Dollar’s Market Has Become Flat

As Traders Wait For US GDP Figures, Dollar’s Market Has Become Flat

January 29, 2023 0 By Wiley McDermott

The trading value of the dollar hardly changed in the Thursday trading session in the European market. Its value did not make much of a movement as the traders were not too excited about it.

This is because the traders are waiting for the US GDP figures to come out as soon as possible. Until the data comes out, the traders may not make any move or open any new positions in support of the dollar.

The data is going to give a direction to the traders and that is when they will act upon it. That would be a trendsetter for the dollar and until that happens, the value of the dollar may remain flat and unmoved.

Dollar Index was flat at 101.39

The dollar index (DXY) was not a promising or moving sight for investors. It did not make much progress or development in the latest trading session.

The report shows that the US dollar index has remained flat and has made no significant or noticeable movement. It has mainly remained at 101.39 on a particular day.

Even the individual performance of the dollar against the currencies was not remarkable or significant. The dollar did not make a positive movement against the euro.

Instead, the value of the dollar recorded a downtrend against the euro. The market data shows that the value of the euro surged less than 0.1% against the dollar.

Following the surge, the euro is trading at a high of $1.0964 against the dollar.

The value of the pound has also experienced a less than 0.1% increase against the dollar. The value of the pound against the dollar stands at a high of $1.2407.

Fourth Quarter Performance of the US Economy

The US economy did not see much action in the fourth quarter of 2022. It had reportedly slowed down towards the end.

A significant surge was witnessed in the financing costs as well as the inflation rates. These factors ended up taking most of the spending that was to be made by the consumers.

Just as the inflation rates and the financial costs were rising, other factors ended up supporting the consumers.

These factors included the supply chains that finally streamlined and came into the flow at the end of the year. A major relief that the public saw was the reductions in electricity and energy bill costs.

These factors have supported the public and have provided them a cushion just when things were not right for them.

The GDP figures are yet to come out for the fourth quarter of 2022. However, analysts are speculating that the growth rate may be somewhere around 2.6%.

The growth rate recorded in the third quarter was 3.2%. It simply goes to show that the analysts do not have many high hopes for the fourth-quarter growth rate.

This is the reason why they have set their expectations lower for the respective quarter.

US Feds May Follow Canada

Just recently, the Bank of Canada announced that they are pausing the interest rate hikes. Although there were speculations about the interest rate hikes but the Canadian bank has decided otherwise.

Following the Canadian bank’s decisions, there are speculations that the US Feds may do the same in near future. Such a decision would mean that the trading value of the dollar would weaken.

Therefore, the investors would start moving in the other direction and the value of the dollar would start plummeting.

The South African Reserve Bank has also announced that they are pausing the interest rate hikes. The last time they hiked the interest rates was by 50 bps, increasing the overall interest rates to 7.5%.

As a result, the value of the South African rand has weakened against the dollar. It has moved down to 17.00 against the dollar.