Dollar Index At Six Month High; Looks To Break Yet Another Crucial 105 Mark

Published on Sep 07, 2023 11:52

The dollar index is hovering at six month high in Thursday, edging towards its next crucial 105 mark amid expectations that interest rates will remain at higher levels for a longer time. US data showed the Institute for Supply Management (ISM)`s non-manufacturing PMI rose to 54.5 last month, the highest since February and up from 52.7 in July, fuelling concerns that inflation will remain sticky in the near-term, prompting the central bank to maintain higher interest rates if not a hike. Besides, global growth concerns are also driving investors to safe haven dollar for respite. Currently, the dollar index that measures the greenback against a basket of currencies is quoting at 104.83, its highest levels since mid-March. Meanwhile, the Fed`s Beige Book said job growth was subdued across the nation, although most districts indicated imbalances persisted in the labor market as the availability of skilled workers and the number of applicants remained constrained. With regard to inflation, the report said most districts reported slower price growth, decelerating faster in the manufacturing and consumer-goods sectors. The central bank noted contacts in several districts indicated input price growth slowed less than selling prices, as businesses struggled to pass along cost pressures. Among the basket currencies, EURUSD is quoting at $1.0729, marginally lower on the day while GBPUSD is trading lower at $1.2506.