The US dollar index or it is also known as DXY was observed to consolidate in the 106.40s range. It was happened in Asian session trading on Thursday (17/November).
The greenback lost safe haven demand due to fading geopolitical tensions in Europ. However, it was buoyed by the publication of good United States retail sales data.
The market also continues to look for clues about the direction of the Fed's interest rate policy from the speeches of its top officials. This is important as a reference before they take a further action.
An explosion in Poland yesterday suddenly triggered an increase in geopolitical tensions. That was as it was suspected to be a Russian missile attack.
Investigation Result due to Poland Explosion
However, the results of the Polish and NATO investigations later revealed the fact. They said that the explosion was likely not a deliberate Russian missile attack, but rather a stray missile from a Ukrainian air protection system.
The report immediately urged the United States dollar to weaken again. Meanwhile, the EUR/USD pair climbed to a daily high of 1.0438.
Nevertheless, USD buyers again raised resistance after the release of US retail sales data. The America’s Commerce Department reported that retail sales in that country grew by 1.3 percent.
It was for Month-over-Month period in October 2022, or better than economists' estimates pegged at just 1.0 percent. Core retail sales also skyrocketed by 1.3 percent in the period,while dismissing a consensus estimate of just 0.4 percent.
Federal Reserve Optimistic due to Economy
The data released is a signal that U.S. spending interest remains high amid rising prices, interest rates and unemployment. Federal Reserve officials also continued to express optimism.
It is especially about the economy and interest rates going forward. Some days ago, Fed Governor Chrisopher Waller delivered a hawkish outlook earlier in the week.
Then, it was followed by San Francisco Fed President Mary Daly's who present a similar vision. Daly told CNBC last night that the Fed has enough reason to raise rates to the range of 4.75-5.25 percent by early next year.
Meanwhile, stop that rate hike seems not become their considerations. Waller and Daly's remarks thrilled some market participants who were interested in selling the United States dollar.
So Many Concerns Happened in Forex Market
The situation above makes greenback's slump was put on hold for now. Federal Reserve officials also continued to express optimism about the economy and interest rates going forward.
Meanwhile, market participants are also monitoring developments related to the direction of interest rate policies of other central banks. So many expectations and predictions there.
A lot of people are fixated on what they are going to see about what the Fed and the ECB are going to do. It was said by Edward Moya, a senior market analyst at OANDA,
There's a lot of noise in the forex market due to various situations happened there lately. You could say that Waller and Daly's comments today are a bit hawkish.
Eurozone Inflation Data Release is Awaited
Retail sales (United states) data shows the resilience of the economy. This kind of data can justify the Fed's argument in maintaining its aggressive stance on inflation.
Market participants are now looking forward to the release of Eurozone inflation data as well as the announcement of the UK government's budget plan in the next few hours.p Those are the essential releases for taking some decisions ahead.
Both are equally capable of significantly influencing the interest rate policies of Europe and the UK. Some small-to-medium impact data publications from the United States may also affect the market.
That is why; the release should be informed as soon as possible. The clear information will be good for all people in today’s time.
