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The dollar abandoned its rally Thursday following a long-term debt tender in the United States, as the market continues to process yesterday’s Federal Reserve monetary policy announcement and recent signs of weakening the US economy.
The currency rose just $0.13 to $917.35 at the beginning of the afternoon, after having seen a peak of $923 on Bloomberg screens. The rally evaporated just as there was a successful tender for 30-year US Treasury bonds worth $22 billion.
Meanwhile, he dollar index It climbed 0.56% to 105.24 points and Comex copper fell 1.72% to US$ 4.8 per pound. He dollar index It particularly suffered from the weakening of the euro (-0.68%) and the Swedish crown (-1.17%), given the electoral uncertainty in France that is shaking the markets of the Old Continent.
Day after the Fed
The global purchases of dollars represent a turnaround from the performances of yesterday, Wednesday, a day that was mainly marked by the lower than expected CPI in the US, and where risk appetite resisted the more restrictive signals from the Fed.
The dollar strengthened even as US Treasury yields fell to new two-month lows, after The latest initial claims for unemployment benefits and producer prices will show weaker figures than predicted in the surveys.
The rise in the global dollar “may be due to a perception of weakening of the American economy, that slowdown in the labor market that we are seeing in the jobless claims, where perhaps there is fear that the Fed will not respond aggressively enough in cuts. “We believe it is a temporary reaction, and that in the medium term we will see a weakening of the global dollar,” he told D.F. Ebury risk manager, Enrique Díaz.
Market rates deepened their falls and the dollar index moderated its advance after the multimillion-dollar auction in the US, which saw a demand 2.49 times higher than the amount required by the treasury. This exceeds the 2.42 average of the last six months, in securities that the market watches closely due to their long stretch to maturity.
