Dollar Prices Barely Changed

While the British pound increased in anticipation of the government’s budget update, the dollar was little changed as investors analyzed conflicting U.S. economic data.

The dollar has recently weakened as inflation data and comments from central bank officials raised hopes that the central bank could soon ease the pace of punitive interest rate hikes.

However, after strong U.S. retail sales figures for October, the dollar paused on Thursday.

The euro was unchanged against the dollar at $1.039 after reaching a high of $1.048 on Tuesday.

The dollar index compares the U.S. currency to six major peers. It remained unchanged at 106.27. The index has dropped more than 7% since reaching a 20-year high in September, but it is still around 10% higher for the year as of Thursday.

Markets have priced in a Fed pivot, but retail sales data in the United States strongly contradicts that narrative.

In early London trading, sterling was up 0.18123% against the dollar, to $1.193, and a similar amount against the euro.

Traders will look for hints of a rate hike in remarks from several central bank officials on Thursday. The heads of regional central banks, Raphael Bostic, Loretta Meister and Neil Keshkari, are scheduled to speak.

The dollar fell 0.21143% against the Japanese yen, to 139.28, as it remained near its three-month low. It fell 3.7% last Thursday after U.S. consumer inflation data for October came in lower than expected.

The yuan in China fell 0.36% to 7.126 per dollar as new COVID cases raised fears that officials would order more lockdowns.

The Australian dollar was 0.15% lower at $0.673, while the New Zealand dollar was 0.28% higher at $0.616. The Chinese yuan fell to its lowest level in nearly a week on Thursday, as a surge in COVID-19 cases in the southern province of Guangdong fueled fears of a return to broader lockdowns.