The US dollar weakened quite sharply against all major world currencies in the middle of the week. The expected release of the minutes from the Federal Reserve’s latest monetary policy meeting was to blame.
Slowing down as the right decision
A “substantial majority” of the people who make decisions within the Fed about setting interest rates said that “it would be right” to slow the pace at which interest rates are raised. This follows from the published minutes of the Fed’s last monetary policy meeting, which took place at the beginning of November.
In response, the US dollar weakened 0.8 percent against the Japanese yen and fell 0.6 percent against the euro. However, the dollar was also sent down by a report on business activity, which fell for the fifth month in a row in November.
A sign of economic recession
The level of new orders fell to the lowest level in 2.5 years. According to experts, this is a consequence of high inflation, but also the previous rise in interest rates, which has dampened domestic demand, is already taking effect. Combined with a larger-than-expected increase in the number of claims for unemployment benefits, this is another clear sign of the economic recession.