At 03:25 ET (08:25 GMT), the Dollar Index, which follows the dollar versus a basket of six other currencies, fell 0.1% to 104.123 behind the 0.9% surge overnight, its largest after late September.
A series of European central banks pursued the Federal Reserve’s lead on Thursday, with the European Central Bank, the Bank of England, and the Swiss National Bank, among others, raising interest rates by 50 basis points.
Further, with inflation increasing, the central banks signaled more interest rate hikes.
In particular, ECB President Christine Lagarde stated that, founded on current data. She expected another 50 basis-point increase at the ECB’s subsequent meeting on Feb 2 and conceivably at the one after that and maybe after that.
This indicates that economic pain will persist into 2023, and thus the safe-haven dollar obtained an increase in fears that the global economy
would slip into a recession next year.
Other Currencies
This ‘risk-off’ mood has been scarcely diluted during Friday’s session, although moves have been altered with traders awaiting the departure of Eurozone PMI activity data later in the session.
EUR/USD climbed 0.1% to 1.0631, recovering slightly after falling 0.5% on Thursday.
Investment bank JPMorgan lifted its prediction on Thursday for how high Eurozone interest rates will go, to 3.25% from 2.50%, behind the European Central Bank meeting.
GBP/USD declined 0.1% to 1.2164 after slipping 2% the prior day, its biggest drop after Nov 3.
The latest U.K. retail sales data hampered the sterling recovery, which conducted sales fell for the third time in four months in November, falling 0.4% from October and under 5.9% on the year.
