Investing.com — The dollar was little changed in early trading in Europe on Thursday. The market seems content to wait for US GDP numbers before taking new positions.
By 02:55 ET (07:55 GMT), the US dollar tracks against a basket of six developed world currencies, up less than 0.1% to $1.0964 and less than 0.1% to $1.2407 became.
The US economy is expected to slow in the fourth quarter of last year as high inflation and rising funding costs impacted consumer spending. However, easing supply chain bottlenecks and lower energy prices towards the end of the year are expected to provide some support, in addition to failing to significantly weaken the labor market.
Analysts expect the annual rate to slow to 2.6% from 3.2% in the third quarter.
Wednesday’s announcement of a ‘pause’ of rate hikes after a 25 basis point hike has continued to put pressure on the dollar, prompting speculation that a similar rate hike will follow soon.
Markets are pricing in a similar pause after Thursday’s meeting, which is expected to lift the prime rate by 50 basis points to 7.5%.
“Rand has been underperforming this year and was expected to be well below 17.00 in a major reversal,” ING’s Chris Turner said in a memo to clients. This is likely due to the weak outlook for domestic demand in South Africa amid ongoing energy supply challenges.”
But Turner noted that a weak dollar environment and the re-opening of the Chinese economy should constitute a “bullish cocktail for the Rand”, with both factors should support demand for South Africa’s commodity exports. was flat at 17.099 to the dollar and has been trading flat since late November.
Elsewhere, , , and a “quiet period” ahead of next week’s central bank meeting will ensure no trade-off comments from central bank officials. Markets are currently pricing in another 100 basis points of tightening from the ECB at the next two meetings, but at the last meeting the Monetary Policy Committee’s decision split him into three. Given , the outlook for the Bank of England is less clear.