While Market Awaits GDP Figures For United States, Dollar Price Falls FlatFebruary 3, 2023
In the Thursday trading session, the trading price of the dollar did not witness much of an improvement. The dollar mainly remained flat and did not show much of a movement.
The reason behind the flat performance of the dollar is that investors waiting for the GDP figures for the United States.
Until they see what the situation has to offer for the United States, they will not make any movement. Once the data is out, the investors will know what they have to do.
That is when the investors will start opening new positions and demonstrate whether they are bullish or bearish about the dollar.
The USD dollar index has shown that the trading price of the dollar has remained flat against the six major currencies.
It mainly remained flat and it currently stands at 101.39 against the six basket currencies. As a result, the investors were not excited at all and the price of the greenback did not see much of a movement.
The trading price of the dollar has recorded a slight dip against the pound. It has also recorded a slight dip against the European currency.
As per the market officials, the trading price of the dollar has dipped 0.1% against the pound as well as the euro. The dollar now trades at $1.2407 against the pound while it trades at $1.0964 against the euro.
Slow US Economy
The investors were not happy as they looked at the final quarter of the year 2022. They saw that the economy of the United States recorded a dip in that particular period.
The economy was badly impacted by the rising financing costs and high inflation rates. The country was badly hit by these factors towards the end of 2022 making things worse for the traders.
As consumer spending declined, it caused a major decline in the US economy. While the economy was facing a major downtrend, two major factors provided support to the US economy.
With the year 2022 coming to an end, energy costs started to decline. This helped the consumers tremendously as they were able to maintain some level of spending, which supported the economy.
Then comes the supply chains that are now moving in a fine rhythm. The supply chains were a huge problem throughout the years 2021 and 2022.
By the end of the year 2022, the supply chain disruptions were fixed and the flow was established. This has ensured that people gain access to supplies in a fast and quick manner.
The situation has become very favorable with respect to energy costs and supply chains for consumers.
Even the labor market has shown no signs of weakening and things are moving in the right direction for the US economy.
Drop in Growth Rate
The data shared by the analysts show that in the third quarter, the growth rate for the US economy was 3.2%.
However, the rate dropped significantly in the fourth quarter of 2022. In the fourth quarter, the growth rate was just 2.6%, which goes to show that it has slowed down.
Canada to Pause Interest Rate Hikes
The Canadian Feds recently announced that they had decided that they would no longer hike the interest rates. However, they did confirm that it was on a temporary basis but the duration would be indefinite.
Due to the recent announcement made by the Canadian Feds, the investors are hoping that the US Feds may make the same decision.
If that happens, then the dollar price may slide significantly and make things promising for other major currencies.
After the announcement, the value of the Canadian dollar declined against the US dollar. As for other currencies such as the Japanese yen and the euro, their values are still surging against the dollar.
This is because these regions are still hiking the interest rates to control their increasing inflation rates.