The dollar was down in Asia on Friday morning, and it looks like it will drop for the first time this month. Investors’ fears of a recession grew after the U.S. Federal Reserve said it would “unconditionally” fight inflation.
The U.S. Dollar Index, which compares the dollar to a basket of other currencies, was at 104.25 at 1:28 a.m. ET, a 0.17 percent drop from where it had been (5:28 AM GMT).
The USD/JPY pair went down by 0.12% to 134.76.
The Australian dollar rose 0.34 percent to 0.6912, while the New Zealand dollar rose 0.46 percent to 0.6304.
The GBP/USD pair increased 0.16 percent to 1.2280, while the USD/CNY pair decreased 0.06 percent to 6.6947.
The EUR/USD went up 0.19 percent to $1.0543 after falling 0.44 percent overnight because German and French purchasing managers’ index numbers were worse than expected. This made people think that the European Central Bank (ECB) might change its monetary policy to be less aggressive.
Ken Crompton, an interest-rate strategist at National Australia Bank (OTC: NABZY), told Reuters that the market has started to cut prices for the next couple of ECB meetings by a fair amount.
“There have been a few things that have really added up and started to make people wonder how far the ECB will be able to go with its tightening.”
Fears of a recession also lingered in the state because of the tightening of monetary policy. The U.S. manufacturing purchasing managers index (PMI), which was released on Thursday, was 52.4 in June. This was lower than the 56 that Investing.com had predicted, and it was also lower than the 57 that was seen in May. This means that factory activity was slower in June.
In his second day of testimony to Congress, Fed Chair Jerome Powell said that the Fed’s fight against inflation is “unconditional.” On the same day, Fed Governor Michelle Bowman said that she supports another 75-basis point interest rate hike in July and then a few more half-point hikes.
