The US dollar strengthened after the latest statistics from the United States, and the dollar index, which measures the value of the dollar against a basket of six major world currencies, recorded its tenth consecutive week of gains. That is its longest growth period in nearly a decade, Reuters reported.
Weakness
The dollar index rose 0.2 percent to 105.6 points, after climbing as high as 105.78 points during the day. It gained roughly 0.3 percent for the entire week.
U.S. business activity nearly ground to a halt in September. S&P Global said its flash estimate of the composite PMI, which tracks the manufacturing and services sectors, fell to 50.1 in September from August’s final reading of 50.2. The September result was thus barely above the 50-point level that separates growth from decline.
“It’s a slight weakness, but weakness nonetheless,” analyst Michael Brown of Trader X said of the U.S. data. But he added that the U.S. continues to outpace the rest of the world and is likely to continue to do so for some time. This should help the dollar to rise further in the medium term.
Recession
So far this year, the US economy is defying forecasts that it will fall into recession. According to most economists, this should be caused by an aggressive increase in interest rates by the American central bank (Fed), which is thus trying to suppress inflation.
The Bank of Japan today decided to continue its extremely loose monetary policy. It left short-term interest rates unchanged at minus 0.1 percent. It also continues to keep the ten-year government bond yield close to zero. In response, the Japanese yen fell 0.6 percent to JPY 148.37 against the dollar.
source: ÄŒTK
