The U.S. Dollar recovered slightly from yesterday’s losses but was trading cautiously against major currencies today. Concerns over the pace of interest rate hikes by the Federal Reserve continued to weigh on investors ahead of the release of retail sales and consumer sentiment data.
Dollar back in demand
The dollar pared early losses against the Japanese yen, adding 0.12% to 112.55 yen per dollar. The world’s reserve currency slipped to a 15-month low against the yen to 110.98 on Thursday as investors fled to low-risk safe haven assets. The overall mood across the markets is subdued as market participants reel under the fear of another approaching global recession.
Also, the sharp bearish momentum in oil continues to eat away at sentiment. Crude oil prices largely traded around $28 per barrel today even as the United Arab Emirates expressed OPEC’s desire to cooperate for an oil output cut.
Some Concerns Remain
The dollar appeared to be gradually strengthening against major currencies after the market seemed to have moved over the Federal Reserve’s statements yesterday. In her testimony before Congress, Fed Chair Janet Yellen maintained guarded optimism over the direction of the U.S. economy while adding that rate hikes could take place at a slower pace than earlier projected. Following that, the dollar bore the brunt as the market interpreted the remarks negatively, in the sense that the economy was not strong enough for rate hikes.
However, the greenback recovered today as it gained some ground against the euro. EUR/USD was down by 0.46% to 1.1269. According to reports, German gross domestic product recorded 0.3% growth in the fourth quarter, which met expectations. On a yearly basis, Germany’s GDP went up by 2.1% in the last quarter, which came below the forecast of 2.3% growth rate.
Meanwhile, USD/CHF was up by 0.45% to 0.9767, reflecting some decreased interest towards Swiss Franc, which is considered a safe haven asset. The British pound moved up by 0.22% to 1.4507 against the dollar today.