Foreign Exchange Report
Monday 14/11/2022
,,The U.S. Dollar held steady in Asian trade on Monday following comments from Fed governor Christopher Waller stating the central bank was not weakening the fight against inflation. The cooler-than-forecast inflation data published on Thursday sent the Dollar into freefall, declining 4% for the week, the worst week recorded in over two and a half years. Yet on Monday, the Dollar index, gauging the currency against a basket of six rivals, edged up 0.234% to 106.960, moving away from the close to three-month dip of 106.27 hit at the end of last week. However, global equities rose on Monday as investors turned to risky assets on forecasts the peak in inflation indicated less aggressive Fed rate hikes, Reuters reports. Yet governor Waller said on Sunday that last week’s inflation was “just one data point” that needs to be followed, and other readings are required to prove inflation was slowing down. Nevertheless, he added that the Federal Reserve could now focus on slowing down rate increases. “I think the market got a little bit ahead of itself,” stated Carol Kong, a currency strategist at Commonwealth Bank of Australia.
Elsewhere, the Pound was down 0.74% at the time of writing at $1.1747, following a 4% rise in the prior two sessions ahead of Thursday’s Autumn Statement when Chancellor Jeremy Hunt is set to outline tax hikes and spending cuts, Reuters reports. The 4% advance is the largest since March 2020, a time when markets were recovering from the initial hysteria surrounding the Covid outbreak.
In addition, the Japanese Yen fell 0.60% to 139.63 per Dollar whilst the Euro edged down 0.47% to $1.0303. Both the Australian and New Zealand Dollars trimmed gains made after China toned down its zero-Covid strategy.
India’s Rupee was also down against the greenback on Monday, trading at 81.0825 to the Dollar, down from 80.7950 in the previous session, after opening at 80.52. According to a spot currency trader, there was a “mad rush” to buy Dollars after the open, and it seems the bottom (for USD/INR) is now in place at around 80.50. ''