5 Dec 2022

USD falls as Powell says rate hikes may slow

USD fell last week after Federal Reserve Chairman Jerome Powell said that the U.S. central bank could scale back the pace of its interest rate hikes "as soon as December," driving emerging currencies higher against the USD.

author dp
Team INRBonds
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  • USD fell last week after Federal Reserve Chairman Jerome Powell said that the U.S. central bank could scale back the pace of its interest rate hikes "as soon as December,"
  • Comments from Fed chair Jerome Powell have boosted the risk appetite to the detriment of  safe haven USD, driving emerging currencies higher against the USD.
  • US jobs report showed that 263,000 jobs were added in November, well ahead of the 200,000 forecasts. The October headline figures were also upwardly revised to 283,000 from 261,000.
  • The unemployment rate came in at 3.7%, expectations had been for a rise to 3.8%. Meanwhile, average hourly wages jumped to 5.1% year on year, defying expectations of 4.6%, average hourly wages rose 4.9% in October.
  • Following the strong labor market, particularly the surge in hourly wage growth means that pressure remains on the US federal reserve to keep hiking interest rates.
  • India’s foreign exchange reserves rose for a third straight week to USD 550.14 billion, up from USD 547.25 billion. India’s forex reserves have been rising since the USD fell off its peak after hitting a two-year low of USD 524 billion in October.

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