Dollar Down Despite a Potential U.S. Interest Rate Hike
2022.07.26 07:59
By Zhang Mengying
Investing.com – The dollar was down on Tuesday morning in Asia ahead of the U.S. Federal Reserve policy decision.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.09% to 106.38 by 12:42 AM ET (4:42 AM GMT).
The USD/JPY pair edged down 0.13% to 136.49.
The AUD/USD pair inched up 0.06% to 0.6957, and the NZD/USD pair inched down 0.02% to 0.6263.
Australian Consumer Price Index rose to 6.3% year-on-year, the fastest pace in more than three decades.
“There may be some slight upside for the Aussie, depending on the data,” said analysts at ANZ Bank.
“A 50bp hike from the (Reserve Bank of Australia) next week is all but a foregone conclusion – the main risk is for a larger hike,” ANZ Bank analysts said.
“But this would require a very, very high CPI number, given that the RBA has more flexibility with its monthly meetings.”
The USD/CNY pair inched up 0.03% to 6.7529, while GBP/USD pair edged up 0.18% to 1.2063. The Bank of England is likely to deliver a 50 bp interest rate hike next week.
The Fed’s two-day meeting remained the focus of the markets while investors are priced for a 75 basis-point rate hike.
“I don’t think the market’s got a very good, confident feel that it’s going to be one flavor of surprise or the other,” Westpac in Auckland analyst Imre Speizer told Reuters.
“Which is enough to hold the dollar in place.”
Meanwhile, investors are also looking to the earnings reports from the likes of Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL), which are due this week. They are also assessing the impact of ongoing disruptions to European gas supplies from Russia.
