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Peter Davis

An writer at FOMOdrive

  • Sep 14, 2023
  • 2 min read

The US dollar has been growing at record levels since 2014

The dollar is poised to achieve its most significant weekly increase in nine years.

For the past eight weeks, the dollar index has been increasing, with a total rise of 5%.

For the first time since March 15th, the DXY closed the week above 105.

For the past eight weeks, the euro has been on a downward trajectory due to the weakening of the eurozone economy.

For the past eight weeks, the dollar has been increasing due to robust US economic figures, which have raised questions about the conclusion of the Federal Reserve's rate increase cycle. This kind of growth has not been seen since 2014.

This week, Reuters reported that the US services sector had an unexpected surge in August, and jobless claims reached their lowest point since February.

In July, industrial production in Germany, which is usually the main driver of growth in the eurozone, decreased for the third consecutive month.

The Eurozone's economic growth for the second quarter was revised from 0.3% to 0.1%, and emerging economic indicators suggest that there will be a further decrease in activity in August.

The recent stability of the euro indicates increasing uncertainty as to whether the European Central Bank will increase rates at its gathering on Thursday.

ING notes that the data from the US is very clear and this comes at a time when the manufacturing sector in Europe is very weak. Consequently, there are questions as to whether the European Central Bank will be able to make one more, final rate increase.

Futures trading in the rate market indicates that there is only a 35% probability that the European Central Bank will increase rates at its September 14 gathering.

State Street Global Markets declared that inflation in the eurozone is still higher than usual and economic growth is much lower, leading to the eurozone entering a period of stagflation.

Swap markets had been predicting rate cuts for the rest of this year back in June, however, the dollar may still be able to recover from its period of weakness earlier this year. The Federal Reserve has finished its cycle of rate hikes and is unlikely to begin cutting rates until the middle of next year.

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