Due to the stronger dollar and the much-anticipated inflation data published the day before, which heightened concerns regarding the prospects for UK growth, GBP briefly fell below the $1.2 mark.
According to minutes made public on August 17, Fed officials found limited proof that pressures on US inflation were diminishing by the end of July. The minutes predicted a slowing in the rate of raises in the long term, but they did not predict a move to rate decreases in the next year, which has been lately counted into the interest rate futures by traders.
The likelihood of a third successive 75 bps rate increase by the Federal Reserve in the coming month is roughly 40%, according to traders, who also anticipate that rates would top at 3.7% by Q1 and stay there until further in the next year.
The US dollar gained the greatest ground versus the Australian dollar in the Asian Session, which fell as wage growth which was disappointing and hurt Australia’s prospects for interest rates.
The Australian dollar dropped to $0.6899 before recovering to $0.6916 in response to erratic employment statistics revealing declines in employment and unemployment numbers. Anchored around yesterday’s lows, the New Zealand dollar recently declined at $0.6258, by 0.35%.
The Chinese yuan, on the other hand, has persisted in its struggles as the outlook for the nation has been severely clouded by restrictive COVID-19 policies, low spending, anemic credit growth, low confidence, as well as a real estate crisis, Making it fall down by 0.2% against the US dollar.