Dollar Drops Lower

The Dollar Index (DXY) follows the dollar versus six other currencies. At 03:15 ET (08:15 GMT) it traded 0.1% lower at 101.965, just over the seven-month low of 101.77 seen earlier in the week.

The dollar has declined by higher than 10% since peaking in late September after a rally flared by forceful tightening throughout much of 2022.

U.S. retail sales resumed a selloff on Wednesday, with U.S. retail sales posting their biggest drop in a year in December and manufacturing registering their biggest drop in nearly two years, fueling fears that the world’s largest economy is heading into a recession.

Rising Inflation

USD/JPY fell 0.5% to 128.26, as the yen rebounded from heavy losses and the Bank of Japan kept its yield curve control policy band, defying expectations for further rate adjustments.

Nevertheless, speculation that rising inflation will push the bank into eventually transforming this ultra-loose policy saw the yen rebound sharply.

Elsewhere, EUR/USD rose 0.3% to 1.0819, hovering near a nine-month high, as ECB officials pushed for an aggressive rate hike.

The GBP/USD fell 0.1 % to 1,2321, which is a 12,435 drop from the monthly height of the meeting. Meanwhile, AUD/USD fell 0.7% to 0.6894 after data showed the country’s labor market unexpectedly cooled from December’s record high.

NZD/USD tumbled 0.6% to 0.6399 after the news that Prime Minister Jacinda Ardern will quit by early February.