The U.S. dollar fell on Wednesday. What about Euro and Yen?
The U.S. dollar ended in the red on Wednesday. It plummeted against the Euro, at last firming slightly near its lowest level in two months versus the common currency. Investors awaited results from the U.S. elections. They also looked out for inflation data. That latter is due this week and will offer a new perspective on the interest rate outlook.
The Euro also declined slightly, dropping by 0.2% to $1.0051. However, it still traded near the fresh peak of $1.0096. The currency skyrocketed overnight, hitting its highest level since September 13.
Meanwhile, the greenback exchanged hands at 145.17 yen in Asian trade. The currency plummeted to its lowest level against the safe-haven Japanese currency in November. In addition, it collapsed to 0.9814 versus Swiss francs, its lowest level in almost five weeks.
Traders bet on the Federal Reserve slowing its aggressive interest rate hikes. At the same time, China started easing its coronavirus restrictions to support economic growth. These factors sent the U.S. dollar in the red, weighing on it heavily in the last week.
On Wednesday, investors focused on U.S. midterm election results, though. The latter showed an uncertain picture. It seems Republicans have better chances of winning a majority in the House of Representatives, but the forecasts are divided when it comes to the Senate.
What do the analysts say?
Michael Hewson, the chief markets strategist at CMC Markets, noted that if the Republicans win and get into one of the Houses, the Democrats won’t be able to spend as much money as they do now. That could be much less inflationary, which is good in terms of yields. Furthermore, such results can be positive for stock markets, as well. Even though the greenback is declining now, traders’ main focus is still on tomorrow’s CPI numbers, and the currency may change the course after that.
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