The euro fell to a two-month low against the dollar and a 12-month low against the pound after German and eurozone business activity slumped more than expected in August, leading to concerns about the state of the European economy and potential pauses in tightening measures by the European Central Bank, while the dollar rose to a two-month peak amid positive U.S. economic data.
The US Dollar experienced a significant decline due to weak economic data and increased risk appetite, while the Euro and British Pound strengthened. The Australian Dollar and New Zealand Dollar also performed well, and gold and cryptocurrencies rallied.
The US dollar dropped to a two-week low against the euro and other currencies after data revealed lower than expected private payroll growth in August, leading to speculation that the Federal Reserve will halt interest rate increases.
The U.S. dollar declined due to weaknesses in economic growth, leading to a boost in the performance of gold and U.S. equities, while other global assets experienced mixed price movements throughout the week.
Most Latin American currencies fell as the dollar strengthened on robust U.S. economic data, with the Mexican peso leading the declines, while Chile's peso gained after the central bank cut its benchmark interest rate and lowered its economic growth forecast for 2023.
The U.S. dollar's share in global reserves has fallen below 60% for the first time in decades, as other currencies like the Euro, Pound, and Yen are on the rise due to a growing number of countries settling trade in their national currencies, driven by the de-dollarization process initiated by BRICS to end reliance on the U.S. dollar.
Most Latin American currencies weakened as the likelihood of tighter U.S. monetary policy reduced appetite for riskier assets, causing the Brazilian real to drop below 5 per dollar for the first time in over a month.
The dollar weakened and global equities dipped as investors grappled with U.S. unemployment data suggesting a tight labor market and the Federal Reserve's commitment to higher interest rates, while European stocks rebounded from losses.
The euro's value may fall to parity with the dollar again as US yields rise and concerns about euro-area growth and inflation persist.
The US dollar weakened against a basket of currencies as Treasury yields fell, while attention turned to upcoming US economic data ahead of the Federal Reserve's monetary policy meeting.
