Dollar slips as bets mount for less hawkish Fed, euro above parity - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.

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The dollar retreated on Thursday as market expectations mounted that the Federal Reserve will tone down its aggressive stance on interest rate hikes, pushing the euro further above parity and lifting its other major peers to multi-week highs.

The euro peaked at $1.00935 and sterling at $1.1645 in early Asia trade, both their highest since September 13.

“But certainly near term, given how much was priced, we’ve seen a bit of retracement in the dollar … Our sense is that it’s a bit of a consolidation of the recent moves rather than extension of further dollar declines.” Housing data released this week, which showed that US single-family home prices sank in August and sales of new US single-family homes dropped in September, added to the case that the Fed’s aggressive tightening cycle is already working to slow the economy.

The main focus on Thursday will be a rate decision by the European Central Bank, with markets expecting it to deliver a 75 bp rate hike.“The question is whether they want to … show that full commmitment to the inflation mandate, or whether they show weakness or concerns in terms of what looks to be a challenging growth outlook.”

 

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