Dollar fell although it continues to rise for the eighth week in a row By Investing.com

Investing.com – The US dollar fell in early European trade on Friday although it remains on track for an eighth straight week of gains, as the US economy’s resilience casts doubt on further interest rate hikes by the US Federal Reserve.

At 9:10 a.m. EDT (09:10 a.m. EDT), the Dow Jones Index, which tracks the currency’s performance against a basket of six other major currencies, was down 0.2% at 104.807, although it remains close to Six-month highs recorded at 105.15. yesterday.

More rate hikes from the Fed?

Data released this week paint a rosy picture for the US economy, which unexpectedly gained momentum in August while reaching its lowest level since February.

All signs point to him leaving interest rates unchanged when he meets later this month, but this economic resistance creates uncertainty about what the Fed might do at the end of the year.

“The outlook is inherently uncertain. But my theory is that there is work ahead,” the Dallas Fed president said Thursday.

His colleague, the head of the Federal Reserve Bank of New York, said Thursday of the current tightening of monetary policy that it is “quite clear that we are constrained” but that “it remains an open question as we move forward.”

European economies are facing difficulties

In contrast, economic news out of Europe was generally more depressing.

GDP growth in the euro area did not exceed only 0.1% in the second quarter, compared to the previous three months, and the German manufacturing sector, which is dominant in the region, suffered serious difficulties.

Friday brought some good news: it grew 0.8% month-over-month in July, well above expectations of 0.1% and the 0.9% decline in the previous month.

It has raised interest rates at each of its last nine meetings, but the region’s economic slowdown points to a pause next week, even if inflation remains high.

The pair was up 0.2% at 1.0715, recovering somewhat after hitting three-month lows at 1.0686 on Thursday, while it was up 0.1% at 1.2483 after also hitting three-month lows the previous day.

The Chinese yuan hits its lowest level since 2008

In Asia, the pair rose 0.3% to 7.3487, with the yuan falling to its lowest level against the dollar since February 2008, affected by escalating diplomatic tensions between Beijing and Washington, as well as concerns about the economic slowdown in China.

The pair fell to 147.28 and is approaching 10-month lows, after the Japanese government revised downward its preliminary growth estimates for the second quarter.