Dollar Drops To 7-Month Low As Fed Rate Rises

A screen shows the closing numbers on the trading floor at the New York Stock Exchange (NYSE) in New York City on September 22, 2022. (Photo by ANGELA WEISS / AFP) (Photo by ANGELA WEISS/AFP via Getty Images)

At a glance

  • The dollar touched a seven-month low on Wednesday, reversing a trend that dominated much of 2022 as lower expectations of sharp Federal Reserve rate rises eased pressure on global markets.
  • The fall in the US currency, one of the steepest since the aftermath of the global financial crisis, came as US retail figures showed a 1.1 per cent year-on-year drop in sales in December — a bigger than expected fall that highlighted continuing weakness in the US economy.
  • “The trend has been very much in favour of dollar weakness, so it doesn’t take much to push it further in that direction,” said Alan Ruskin, head of G10 FX strategy at Deutsche Bank. “Any minor macro information can sway [the dollar].”

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