FOREX
The US dollar is on the back foot during early Wednesday trading, losing ground to other major currencies. Chinese data released earlier in the session revealed a strong rebound in manufacturing activity in the world’s second largest economy, highlighting the recovery that followed the end of the zero-Covid policy. The good news from China triggered a bout of risk appetite that penalized the safe-haven dollar and boosted the Chinese currency, with the offshore renminbi up by almost 1% in relation to the greenback. The euro is also riding this wave of risk appetite, ahead of the release of important European economic data, including PMI numbers for France and Germany, and eurozone inflation figures which come out tomorrow. The strength of the single currency shows that investors believe in the resilience of the old continent’s economy and expect inflation to remain elevated; a scenario that entails further bullishness from the ECB and more rate hikes than some had until recently expected.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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