U.S. Dollar Appreciates On Growth Worries

The U.S. dollar climbed against its most major counterparts in the European session on Thursday, as European stocks fell on growing concerns about an economic downturn as central bank chiefs across the world emphasized their commitment to control inflation despite the risks to the economy.

At the European Central Bank's forum in Sintra, Portugal, central bank governors said that bringing down high inflation is their main goal, raising concerns over a global economic downturn due to the tightening of monetary policy.

Federal Reserve Chair Jerome Powell said that the central bank is prepared to proceed with tightening until it is confident that inflation is under control.

Data from the Commerce Department showed that U.S. personal income increased in line with economist estimates in May.

The report showed personal spending rose by 0.5 percent in May, matching the revised increase seen in April as well as expectations.

Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent in May after climbing by a downwardly revised 0.6 percent in April.

Economists had expected personal spending to increase by 0.5 percent compared to the 0.9 percent advance originally reported for the previous month.

The greenback touched 2-week highs of 1.0382 against the euro and 1.2092 against the pound, following its early lows of 1.0469 and 1.2166, respectively. The greenback is seen facing resistance near 1.02 against the euro and 1.19 against the pound.

The greenback moved up to a 3-day high of 0.9606 against the franc, from a low of 0.9530 hit at 2 am ET. The greenback is likely to face resistance around the 0.98 region, if it gains again.

Against the loonie, the greenback was up at a 6-day high of 1.2933. The currency may challenge resistance around the 1.32 level.

In contrast, the greenback was trading at 0.6901 against the aussie and 0.6238 against the kiwi, retreating from its previous session's more than 2-week highs of 0.6854 and 0.6198, respectively. The greenback is poised to target support around 0.72 against the aussie and 0.64 against the kiwi.

The greenback fell to 135.79 against the yen, off its Asian session's high of 136.81. On the downside, 124.00 is possibly seen as the next support level for the greenback.

US Dollar vs CAD (FX:USDCAD)
Forex Chart
From Nov 2023 to Dec 2023