Saqib Iqbal Ahmed
NEW YORK (Reuters) – The dollar rose against most major currencies on Wednesday as the results of the U.S. midterm elections showed little sign of a ‘red wave’ so far” A huge Republican victory, expected by some, has investors focusing on upcoming inflation data.
Republicans made modest gains in the midterms, but Democrats outperformed expectations , as control of the Senate hinges on three races
A strong showing by Republicans may support the idea of reducing fiscal support and potentially lower the peak of the Fed’s eventual interest rate, which would be bad for the dollar, Joe Manimbo said, senior market analyst at Convera in Washington.
“The market is now in the process of turning the political page and preparing for tomorrow’s inflation report,” said Manimbo.
Investors are waiting to see whether Thursday’s U.S. consumer price index data will spur the Federal Reserve to hike rates next year to keep inflation in check, or whether it will ease policy tightening.
Dollar in recent weeks The pullback from multi-decade highs comes as investors take profits after a months-long rally and speculation mounts that the Fed may be edging closer to pulling the curtain down on the dollar-supporting rate hikes.
“The inflation report could be a good litmus test of whether dollar sentiment has weakened significantly,” Manimbo said.
EUR/USD traded at 0.70 USD vs. USD 1 down, while USD/JPY is up 0.7%.
The outlook for the USD remains bleak.
“Despite the dollar’s gains today, the overall trend remains weak, and we still think the USD The bull cycle is maturing, and the currency is likely to be weaker going forward,” Shaun Osborne, chief foreign exchange strategist at Scotiabank, said in a note.
GBP/USD fell 1.73% to US$1.1337Due to investor concerns that the currency will not be able to break above US$1 the previous day10 level, rising for three consecutive days. In the UK Chancellor of the Exchequer Jeremy Hunt (Jeremy Hunt) plans to Investors remained on edge ahead of the fiscal announcement, with signs of a squeeze on public spending and possible tax increases.
Wednesday, due to Investors continued to worry that the dollar was also underpinned by a bout of risk aversion ahead of Thursday’s inflation report and the cryptocurrency’s second day of weakness. stability and financial health of major exchange FTX.
FTX’s native token is down 43% at a more than two-year low of $3. 112, while Bitcoin is 16.% is less than $16,809.83, just off a two-year low of 16, 83.98 touched earlier in the session.
