Dollar And Sterling Edge Lower While Aussie Dollar Records A SurgeJanuary 27, 2023
The value of the dollar did not make much of a movement in the Wednesday trading session in the European region. This is because the traders are not ready to make a move on the dollar.
For now, the traders are preferring not to intervene and try to push the trading price of the dollar until they have more data pertaining to the US economy.
Traders Await GDP Figures
As of now, the traders are not ready to make a move as they await the GDP figures for the fourth quarter of 2022. The data is set to be released by the US Feds on Thursday.
Until the data comes out, the traders are not going to make much of a move in favor of the dollar. This is the reason why the market is not witnessing much of a movement in the trading price of the dollar.
The data shows following the recent developments, the US dollar index has not made a remarkable movement.
The DXY has reportedly moved less than 0.1% in the particular trading session. The value of the dollar against the basket of six major currencies is currently lying at 101.715.
Figures May Point toward the Recession
According to economists, the latest GDP figures will give a better picture of the country’s economy throughout the year 2023.
It will provide a clearer picture and understanding to the market observers of how and when the recession would hit the US economy.
When that happens, the entire world will need to brace for the impact and the situation will turn bonkers all over the world.
The traders have been very concerned about the GDP figures. Their concerns were raised especially after the US Feds shared the retail sales figures for the month of December.
The figures suggest that the US Feds may continue hiking the interest rates. This could mean that the Feds may hike the interest rates towards a fast recession that the country may find hard to recover from.
Sterling Caught the Attention of the Traders
Sterling was also among the most focused currencies in the latest trading sessions. The reason was the government recently shared the producer price inflation (PPI) data.
The PPI data reportedly came out to be much lower than what the economists and the Bank of England (BOE) had expected.
This could be attributed to the sudden decline in the prices of natural gas, which has helped the manufacturing sector tremendously.
As for the input prices, they recorded a 1.1% decline in the month of December. Following the date, the annual input prices rate has moved down from 19.2% to 16.5%.
This is the lowest level the annual input price rate has recorded in the past 10 months.
While the input prices rate recorded a dip, only a 0.8% drop has been for the PPI output prices. This goes to suggest that despite the weak economy, the companies still have a margin to save some of their profits.
Despite the recent developments, the value of the sterling has recorded a slight dip versus the dollar. The sterling has recorded a 0.1% dive against the dollar value. It is currently trading at $1.2322 against the dollar.
Different Story for Australia
While the UK inflation rates are falling, the situation is totally opposite in Australia.
Compared to the United Kingdom, the inflation rate has been on the rise in Australia. The data shows that in the fourth quarter, the annual rate of inflation increased to a high of 7.8%.
In the previous quarter, the inflation rate was sitting at 7.3%. This means that the inflation rates are still rising in Australia and the Reserve Bank of Australia has to tighten its monetary policy.
The data shows that the trading value of the Australian dollar has surged by 0.8% and it is now trading at 0.7122 (a new five-month high).