Dollar down on economic slowdown fears

The dollar trended lower today, Friday, after rising in the previous session, as traders analyze a group of central bank interest rate increases and the possibility of continuing to raise borrowing costs for a long time.

According to Reuters, the euro settled against the dollar at $1.063. This came after falling 0.5 percent on Thursday after the European Central Bank raised interest rates, indicating that the hike is far from over. This raised concerns about potential damage to the global economy and pushed investors towards the dollar as a safe haven

Federal Reserve Chairman (US Central Bank) Jerome Powell said on Thursday that policy makers expect interest rates to increase further and to remain high for a longer period.

The “hawkish” statements of central banks prompted dealers to reconsider their bets that the damage caused by high interest rates may end soon. This led to heavy selling in global stocks and European bonds on Thursday and Friday, which led to support for the dollar and pressure on currencies considered more risky.

Against the Japanese yen, the dollar fell 0.49% on Friday to 137.08. It fell 0.07 percent against the pound sterling, which was trading at $1.219.

The dollar index, which measures the performance of the US currency against six major currencies, remained roughly lower at 104.2, after rising by more than 0.9 percent yesterday, Thursday.

The index has risen nearly 9 percent this year as the Federal Reserve has sharply raised interest rates, drawing money back into dollar-denominated bonds.

However, it has fallen nearly 8 percent since hitting a 20-year high in September, as slowing US inflation revived hopes that interest rate hikes would soon end, and better-than-expected economic data in Europe boosted the euro.

The risk-sensitive Australian dollar fell 0.07% to $0.67. It fell 2.38 percent in the previous session, its largest decline since March 2020.

The New Zealand dollar rose 0.38 percent to $ 0.637.