As worries about a U.S. economic slowdown increased, the U.S. dollar dipped slightly in early European trade on Friday and maintained its seven-month lows. The Dollar Index (DXY), which compares the dollar to a basket of six other currencies, dipped 0.1% to 101.750, only 0.1% higher than the seven-month low of 101.51 set on Wednesday.
After suffering significant losses in the final quarter of 2022, the dollar is down 1.3% this year as investors gambled that the Federal Reserve would decrease the rate of interest rate increases in light of Economic indicators that inflation has peaked. Fears that the United States may already be in a recession are increased by the sharp decline in industrial production, which followed the deterioration in retail sales.
In the meantime, figures from the United States this week indicated that the world’s largest economy was faltering, with retail sales in December declining 1.1% on the month and industrial production decreasing by 0.7%. 1.3% less manufacturing was produced. The third month in a row that industrial activity has decreased, with output decreases appearing to be widespread, according to experts at ING.
In other news, Cable fell on disappointing retail sales figures, GBPUSD dropped 0.1% to 1.2372 after U.K. retail sales unexpectedly dropped by 1% in December, significantly less than the forecast 0.5% monthly increase.
