The US dollar weakened as data indicated economic contraction

If the Fed stays on track, broad financial conditions will continue to tighten, the economy will slow toward recession

New York (Armfalcon.com) – The US dollar weakened against a basket of other major currencies in late trading Thursday (Friday morning WIB), as some weaker-than-expected economic data appeared to signal the economy is contracting.

The dollar index, which measures greenbacks against six other major currencies, it was down 0.12 percent to 101.8493 in late trading.

In late New York trading, the euro rose to US$1.0963 from US$1.0952 of the previous session, and the British pound rose to US$1.2440 from US$1.2438 in the previous session.

The US dollar bought 134.3440 Japanese yen, lower than 134.7260 Japanese yen in the previous session. The US dollar decreased to 0.8934 Swiss franc from 0.8976 Swiss franc, and it increased to 1.3472 Canadian dollars from 1.3462 Canadian dollars. The US dollar fell to 10.3189 Swedish krona from 10.3451 Swedish krona.

The US Department of Labor reported on Thursday (20/4/2023) that new jobless claims increased to 245,000 in the week ended April 14 from 240,000 in the previous week. Economists had expected a reading of 242,000.

The Philadelphia Federal Reserve reported on Thursday (20/4/2023) that the Philadelphia Fed’s manufacturing index was -31.3 in April, down from -23.2 in March. It was the lowest reading since May 2020. Economists had expected a reading of -19.4.

“If the Fed stays on track, broad financial conditions will continue to tighten, the economy will slow toward a recession,” said Chris Senyek, chief investment strategist at Wolfe Research, in a note on Thursday (20/4/2023), quoted from Xinhua.

Loretta Mester, president of the Cleveland Federal Reserve, said Thursday (20/4/2023) that “demand continues to outstrip supply in product and labor markets and inflation remains too high,” while noting that the real federal funds rate will remain “in the region of positive for some time” after moving above 5.0 percent.

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Translator: Apep Suhendar
Editor: Click Dewanto
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