Dollar drops The market opened sharply lower against the real on Tuesday, following the weakness of its pair abroad after encouraging comments from Russian and Ukrainian negotiators about the conflict in Eastern Europe boosted global risk sentiment.
At 9:05 am (GMT), the spot dollar retreated 1.10%, to 4.7187 reais on sale.
On B3 (SA:), at 9:05 am (GMT), the first-maturity contract fell 1.03% to 4.7245 reais.
The dollar traded on the interbank market closed the last session up 0.52%, at 4.7714 reais on sale.
The greenback resumed its recent losing streak and ended the day lower against majority of its peers on Wednesday as continued optimism about progress in talks between Russia and Ukraine triggered the return of risk sentiment.
Reuters reported Russia’s lead negotiator at talks with Ukraine said on Wednesday that Kyiv had stated a willingness to meet core Russian demands, but that Moscow’s position on the Donbas region and annexed Crimea remained unchanged.
Vladimir Medinsky said on Russian television that Ukraine had said in writing it was willing to give up its ambition of joining NATO, adopt ‘non-bloc’
status, renounce nuclear and other weapons of mass destruction and commit not to host foreign troops or military bases on its soil.
Medinsky also said Ukraine had agreed not to conduct military exercises with foreign armies except by agreement with state guarantors including Russia.
Versus the Japanese yen, dollar met renewed selling at 123.20 at Tokyo open and fell to an intra-day low at 121.32 in Asian morning due to broad-based buying in jpy. The pair then stabilised and staged a short-covering rebound to 122.24 in New York morning before trading sideways.
Sources from Reuters, the U.S. economy grew robustly in the fourth quarter, the government confirmed on Wednesday,
but momentum has slowed significantly amid a surge in COVID-19 infections at the start of the year, snarled supply chains and soaring inflation.
Gross domestic product increased at a 6.9% annualized rate, the Commerce Department said in its third estimate of fourth-quarter GDP growth.
That was revised slightly down from the 7.0% pace estimated in February. The economy grew at a 2.3% rate in the third quarter.
Growth is 3.1% above its pre-pandemic level. Economists polled by Reuters had expected GDP growth would be revised up to a 7.1% rate.
The revision to the fourth-quarter GDP reading reflected downgrades to consumer spending and export growth.
The single currency traded with a firm bias and extended its recent winning streak to 1.1161 in European morning.
Euro then found renewed buying at 1.1113 at New York open and rose to an intra-day high at 1.1170 on usd’s broad-based weakness.
The British pound also traded with a firm undertone in Asia and gained to 1.3159 in European morning.
Cable then ratcheted higher to session highs at 1.3182 in New York on usd’s weakness before retreating to 1.3127 on cross-selling in sterling especially vs euro.
Data to be released on Thursday:
Japan industrial output, housing starts, construction orders, Australia building permits, China NBS non-manufacturing PMI, NBS manufacturing PMI,.
U.K. nationwide house price, Swiss retail sales, France producer prices, CPI, consumer spending, Germany retail sales, unemployment rate, unemployment change,
.Italy CPI, unemployment rate, EU unemployment rate, U.S. continuing jobless claims, initial jobless claims, PCE price index, personal spending, personal income, Chicago PMI and Canada GDP
Despite the positive outlook regarding progress in the talks between Russia and Ukraine, the greenback continued to lose ground against most of its peers on Wednesday.
Russia’s lead negotiator at talks with Ukraine said on Wednesday that Kiev had made clear it was willing to meet core Russian demands, but that Moscow’s position on the Donbas region and annexed Crimea was unchanged.
According to Vladimir Medinsky on Russian television, the Ukrainian government has stated in writing that it is willing to give up its goal of joining NATO, and adopt a non-bloc approach.
Become a nuclear-free country, renounce nuclear weapons, and commit not to host foreign troops or bases on its soil.
Additionally, Medinsky said that Ukraine had agreed not to conduct military exercises with foreign armies unless they were backed up by state guarantors including Russia.
Due to broad-based yen buying, the dollar fell to an intra-day low of 121.32 against the Japanese yen at Tokyo open due to renewed selling in the yen. In New York morning, the pair stabilised, followed by a short-covering rebound to 122.24 before drifting sideways.
Reuters reported on Wednesday that the U.S. economy grew robustly in the fourth quarter, according to the government.
The momentum has slowed significantly due to an epidemic of COVID-19 infections at the start of the year, snarled supply chains, and rising inflation.
According to the Commerce Department, gross domestic product increased at an annualized rate of 6.9% in the fourth quarter.
In February, the pace was estimated at 7.0%. In the third quarter, the economy grew by 2.3%.
Growth is 3.1% higher than it was pre-pandemic. According to Reuters, economists expected GDP growth to increase to 7.1%.
Consumer spending and export growth were revised down for the fourth quarter.
During European morning, the single currency traded with a firm bias and extended its recent winning streak to 1.1161.
Following the opening of New York, the euro found renewed buying at 1.1113 and rose to an intraday high of 1.1170 on usd weakness across the board.
British pound also traded with a strong undertone in Asia and gained to 1.3159 in European morning.
Cable then climbed to session highs of 1.3182 in New York on the usd’s weakness, before retreating to 1.3127 on sterling cross-selling mainly against the euro.
The following data will be released on Thursday:
Industrial output in Japan, housing starts, construction orders, building permits in Australia, non-manufacturing PMI in China, manufacturing PMI in China.
British house prices, Swiss retail sales, French producer prices, CPI, consumer spending, Germany retail sales, unemployment rate, unemployment change,
CPI in Italy, unemployment rate, EU unemployment rate, initial and continuing jobless claims in the U.S., PCE price index, personal spending, personal income, Chicago PMI, and GDP in Canada
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