Economic Briefing – Baghdad
The U.S. dollar has experienced a significant decline against the Japanese yen and the British pound amid easing concerns regarding a potential global trade conflict. This shift has alleviated fears surrounding escalating inflation that had previously bolstered the dollar’s value.
During early trading on Thursday, the dollar fell to its lowest point in eight weeks against the yen and approached a one-month low against the pound.
Support for the Japanese yen has been driven by rising expectations that the Bank of Japan will consider another increase in interest rates, following comments from a central bank official who urged action based on robust wage growth data.
Despite widespread predictions of a quarter-point interest rate cut by the Bank of England, the British pound remained resilient.
As of 0140 GMT, the dollar had depreciated by 0.5%, trading at 151.81 yen, marking its lowest level since December 12, after a more substantial drop of 1.1% on Wednesday.
The pound was stable at 1.2509 dollars, although it had previously climbed to 1.2550 dollars, reaching this mark for the first time since January 7.
Meanwhile, the euro maintained its position at 1.0401 dollars after experiencing a 0.2% increase the prior day.
The dollar index, which evaluates the performance of the U.S. dollar against major currencies such as the euro, pound, and yen, stood at 107.57. This figure is not far off from the low of 107.29 registered the previous night.
In international markets, the Chinese yuan appreciated to 7.2775 against the dollar.
The upcoming monthly labor data set for release on Friday is anticipated to be a crucial indicator for U.S. monetary policy expectations.
Market forecasts suggest a complete probability that the Federal Reserve will implement a quarter-point interest rate increase by July, with a projected reduction of 46.3 basis points by the December meeting.
At the same time, the likelihood of an interest rate cut by the Bank of England is estimated at 92%. For the Bank of Japan, there’s an approximate 94.8% expectation for a quarter-point interest rate increase by September.
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