On the foreign exchange market, the British pound and the Swedish krona strengthened against other major currencies on Friday. The dollar weakened, apart from strengthening against the Swiss franc and the Australian dollar.
Despite Friday afternoon’s movements, the dollar seems to be reaching its best year in almost a decade, Bloomberg evaluate.
Bloomberg’s Dollar Spot Index is up more than 7 percent this year, its best performance since 2015. The currencies of all other advanced economies have weakened against the dollar this year.
The strength of the dollar speaks of the strength of the US economy, which can still restrain the US central bank’s interest rate calculation.
According to a currency strategist interviewed by Bloomberg, it is expected that the Fed will focus on a low interest rate cut cycle and its policy rates will remain higher than elsewhere, which will also help maintain the historical strength of the dollar.
In the USA, short-term interest rates are falling
Short and long interest rates on US government bonds jerked in different directions on Friday. At the time of the review, the interest rate on its two-year government bond was decreasing by 1.0 percentage points, and the interest rate on the three-year loan had also fallen.
Interest rates on longer-term U.S. bonds were elevated, although moving cautiously downward. At the time of the review, the interest rate on the US ten-year bond was up 0.8 percentage points.
According to preliminary data, US wholesale inventories shrank by 0.2 percent in November from the previous month, when they were expected to grow by 0.1 percent. The previously reported 0.2 percent growth from the previous month was refined to 0.1 percent.
Retail trade inventories, on the other hand, grew by 0.3 percent from the previous month, in line with expectations. In October, they had increased by 0.1 percent compared to the previous month.
Political instability torments Europe’s major economies
At the time of the review, the interest rate on Germany’s ten-year government bond was up 6.3 percentage points at 2.380 percent, the interest rate on its two-year bond was up 4.1 percentage points at 2.086 percent.
The interest rate on France’s ten-year government bond was up 5.5 percentage points at 3.188 percent, and the interest rate on its two-year bond was up 3.9 points at 2.271 percent.
The major economies of the Eurozone are both currently in the midst of political turmoil.
The French prime minister recently changed, and last week the fourth new government was appointed in the current year. In Germany, the president Frank Walter Steinmeier dissolved parliament today, Friday, and snap elections will be held in late February.
Source: www.arvopaperi.fi
