The US Dollar gained strength at the beginning of 2023 as trading normalcy returned after the holiday season. The index reached its highest level since November 2022, boosted by a risk-averse market and positive economic data. Investors are watching for further developments and central bank commentary.
The US Dollar ( USD ) strengthened at the start of the new year as trading conditions normalized following the holiday season. The US economic calendar will feature the ISM Manufacturing Purchasing Managers Index (PMI) data for December later in the day. Investors will also monitor comments from central bank officials. \The USD Index gained more than 0.7% on Thursday, reaching its highest levels since November 2022 above 109.50. Early Friday, the index retreated towards 109.00.
The risk-averse market atmosphere contributed to the USD outperforming its rivals on the first trading day of the year. Additionally, data from the Department of Labor showed that weekly Initial Jobless Claims declined to 211,000 from 220,000 in the previous week, further supporting the USD. During Asian trading hours, the People's Bank of China (PBOC) indicated a likelihood of cutting interest rates from the current level of 1%
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