The Gist
News and Features
Global Philippines Fine Living
Insights
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
Webinars
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
Downloads
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
DOWNLOAD
economy-ss-9
Economic Updates
Quarterly Economic Growth Release: 5.4% Q12025
DOWNLOAD
investment-ss-3
Economic Updates
Policy rate views: Uncertainty stalls cuts
DOWNLOAD
View all Reports
Metrobank.com.ph Contact Us
Follow us on our platforms.

How may we help you?

TOP SEARCHES
  • Where to put my investments
  • Reports about the pandemic and economy
  • Metrobank
  • Webinars
  • Economy
TRENDING ARTICLES
  • Investing for Beginners: Following your PATH
  • On government debt thresholds: How much is too much?
  • Philippines Stock Market Outlook for 2022
  • No Relief from Deficit Spending Yet

Login

Access Exclusive Content
Login to Wealth Manager
Visit us at metrobank.com.ph Contact Us
Access Exclusive Content Login to Wealth Manager
Search
The Gist
News and Features
Global Philippines Fine Living
Insights
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
Webinars
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
Downloads
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
May 29, 2025 DOWNLOAD
economy-ss-9
Economic Updates
Quarterly Economic Growth Release: 5.4% Q12025
May 8, 2025 DOWNLOAD
investment-ss-3
Economic Updates
Policy rate views: Uncertainty stalls cuts
May 8, 2025 DOWNLOAD
View all Reports
Currencies 4 MIN READ

Dollar rises on safe-haven bid, big UK inflation drop hits pound

December 20, 2023By Reuters
Related Articles
BRIEF-First Philippine Holdings Corp Appoints Karen Y. Chung As Vice President March 3, 2022 BRIEF-Manila Bulletin Publishing Corp Accepted Resignation Of Isabel Y. San Pablo As Vice President April 1, 2022 Gold bounces back as dollar retreats July 29, 2022

NEW YORK, Dec 20 – The dollar rose against a basket of currencies on Wednesday as a late-session selloff on Wall Street boosted the US currency’s safe-haven appeal, and as data on sharply falling UK inflation prompted a steep drop in the British pound.

US stocks closed lower on Wednesday after an abrupt mid-afternoon sell-off snapped a rally which had been driven by falling interest rates and the Federal Reserve’s dovish turn.

The dollar was last up 0.28% at 102.42, on pace to break a two-day losing streak. The index had dropped about 1.5% for the week ended Tuesday after last week’s Federal Reserve meeting prompted traders to pencil in several rate cuts in 2024, starting as early as March.

US Federal Reserve officials have since been pushing back on the idea of rapid rate cuts next year.

Helen Given, FX Trader at Monex USA, said Wednesday’s rebound for the dollar was driven in part by a safety bid for the greenback as well as doubts about the Fed actually cutting rates as swiftly as the market is pricing.

“We don’t necessarily believe that the Fed is going to cut as early as the market thinks … so we think this reaction is pretty well merited,” Given said.

Data on Wednesday showed US consumer confidence increased more than expected in December amid optimism about the labor market, which could help to underpin the economy early next year.

The Federal Reserve’s dovish December pivot has boosted the case for the weakening dollar to keep falling into 2024, though strength in the US economy could limit the greenback’s decline, according to investors.

Investors now await US inflation data on Friday for clues to future Fed policy actions.

Meanwhile, the pound was down 0.76% at USD 1.2633, after slipping to a near 1-week low of USD 1.2625.

British inflation fell in November to its lowest rate in over two years, prompting investors to fully price in a BoE rate cut by May 2024 and assign a nearly 50% chance of a cut by March.

“A number of banks have seen pricing for (interest rate) cuts being front-loaded. I think the Bank of England was just a little bit behind because the inflation is higher, but it’s now starting to move in the same direction,” said Vassili Serebriakov, foreign exchange and macro strategist at UBS.

“Also, the pound has had a good run in the past couple of weeks, I think it’s just reversing some of those moves,” Serebriakov said.

Meanwhile, European Central Bank policymaker Joachim Nagel said in an interview published on Wednesday that eurozone interest rates must remain high and traders betting on upcoming cuts in borrowing costs should be careful. The euro was 0.36% lower at USD 1.0941.

The dollar fell 0.14% against the yen to 143.64, a day after the Bank of Japan maintained its ultra-loose monetary policy and opted to wait for more evidence to justify a shift.

“The last thing (the BOJ) wants to do is to have to undo (a rate hike) again in a couple of months’ time,” Rob Carnell, Asia-Pacific head of research at ING, said.

Japan’s government is aiming to reduce its budget next fiscal year for the first time in 12 years, Reuters reported on Wednesday.

In cryptocurrencies, bitcoin gained 3.26% to USD 43,634, its highest since Dec. 9. A spate of filings for spot bitcoin and ether ETFs, including from traditional finance heavyweights, has helped revive the crypto market this year after a series of meltdowns in 2022.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by Iain Withers in London and Brigid Riley in Tokyo; Editing by Andrew Heavens, Emelia Sithole-Matarise, Nick Zieminski, and Sonali Paul)

 

This article originally appeared on reuters.com

Read More Articles About:
Worldwide News Philippine News Rates & Bonds Equities Economy Investment Tips Fine Living

You are leaving Metrobank Wealth Insights

Please be aware that the external site policies may differ from our website Terms And Conditions and Privacy Policy. The next site will be opened in a new browser window or tab.

Cancel Proceed
Get in Touch

For inquiries, please call our Metrobank Contact Center at (02) 88-700-700 (domestic toll-free 1-800-1888-5775) or send an e-mail to customercare@metrobank.com.ph

Metrobank is regulated by the Bangko Sentral ng Pilipinas
Website: https://www.bsp.gov.ph

Quick Links
The Gist Webinars Wealth Manager Explainers
Markets
Currencies Rates & Bonds Equities Economy
Wealth
Investment Tips Fine Living Retirement
Portfolio Picks
Bonds Stocks
Others
Contact Us Privacy Statement Terms of Use
© 2025 Metrobank. All rights reserved.

Read this content. Log in or sign up.

​If you are an investor with us, log in first to your Metrobank Wealth Manager account. ​

If you are not yet a client, we can help you by clicking the SIGN UP button. ​

Login Sign Up