DOLLAR RETREATS AS RISK SENTIMENT IMPROVES; EURUSD RECOVERS AHEAD OF ECB

Published on Jul 27, 2023 13:49

The dollar is staying downbeat on Thursday, extending some of its previous losses after the Fed said that it has decided to raise the target range for the federal funds rate by 25 basis points to 5.25 to 5.50 percent. Investors are probably guessing that Federal rate hikes are nearing its peak. With yesterday`s hike, Fed midpoint of the target range is the highest since early 2001. The central bank said it remains highly attentive to inflation risks and reiterated it is strongly committed to returning inflation to its 2 percent objective. Meanwhile a shift in focus now to ECB monetary statement is pushing euro higher, in turn weighing on the dollar index. The dollar index that measures the greenback against a basket of currencies hit 101.19 in the previous session but eased thereafter to be currently quoting at 100.44, down 0.2% on the day. EURUSD is up 0.22% at $1.1157. Among other basket currencies, GBPUSD is also recovering to $1.299, up 0.25% on the day. Positive tone in equities is signaling improving risk sentiment that is also not auguring well for the safe haven currency. Meanwhile, USDINR on the NSE futures is quoting at 82.02, down 0.1% on the day.