Forex News

Dollar remains weak as Fed nears end of hiking cycle

2023.04.05 04:02


© Reuters.

By Peter Nurse

Investing.com – The U.S. dollar languished near two-month lows in early European trade Monday as weak economic data support the idea that the U.S. Federal Reserve may be near the end of its rate-hiking cycle.

At 02:55 ET (06:55 GMT), the , which tracks the greenback against a basket of six other currencies, edged just higher at 101.295, just above a fresh two-month low of 101.140 hit earlier in the session.

The dollar started last month on a firm footing on expectations sticky inflation would prompt the to take interest rates higher than previously thought.

However, the failure of two regional U.S. banks in March tempered those expectations, and soft economic data has added to the growing belief that the U.S. central bank may soon stop increasing interest rates, a move which is dollar bearish.

U.S. dropped to their lowest level in nearly two years in February, data showed Tuesday, and this followed on from Monday’s Institute of Supply Management’s falling to a 21-month low in February.

Federal Reserve Bank of Cleveland President indicated on Tuesday that the central bank likely has more rate rises ahead of it, seeing the fed funds rate moving above 5%.

However, with the Fed raising rates by a quarter percentage point, to between 4.75% and 5%, in March, this could mean only one more hike of 25 basis points before pausing.

The , on the other hand, potentially could hike by 50 basis points in early May, with Governing Council member Robert Holzmann stating earlier this week that such a move is “still on the cards”.

This “serves as a reminder that the ECB lags the Fed in its tightening cycle and that the ECB will be a lot slower to ease policy,” said analysts at ING, in a note.

traded 0.1% lower at 1.0948, just below the two-month peak it hit on Tuesday, helped by soaring 4.8% in February driven by strong growth in the vehicle construction sector.

“Overall we suspect that the market will be reluctant to chase EUR/USD above 1.10 yet given concerns about the regional US banking system. But a higher EUR/USD certainly looks the direction of travel for the rest of the year,” ING added.

fell 0.1% to 1.2487, slipping from Tuesday’s ten-month high, fell 0.4% to 0.6727, while fell 0.1% to 131.56 after data also showed that Japan’s grew at a higher-than-expected pace in March, largely offsetting a decline in activity.

rose 0.6% to 0.6348 after the Reserve Bank of New Zealand lifted its benchmark by a bigger-than-expected 50 basis points, and flagged more action against high inflation.

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 65,065.43 2.83%
ethereum
Ethereum (ETH) $ 2,635.95 2.47%
tether
Tether (USDT) $ 1.00 0.03%
bnb
BNB (BNB) $ 596.15 1.54%
solana
Solana (SOL) $ 156.15 4.74%
usd-coin
USDC (USDC) $ 1.00 0.01%
xrp
XRP (XRP) $ 0.591065 1.00%
staked-ether
Lido Staked Ether (STETH) $ 2,635.13 2.42%
dogecoin
Dogecoin (DOGE) $ 0.117894 7.95%
the-open-network
Toncoin (TON) $ 5.78 0.29%
cardano
Cardano (ADA) $ 0.401101 4.94%
tron
TRON (TRX) $ 0.153429 2.28%
avalanche-2
Avalanche (AVAX) $ 29.18 6.28%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 21.70%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,105.94 2.49%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 64,989.41 2.95%
chainlink
Chainlink (LINK) $ 12.56 3.36%
weth
WETH (WETH) $ 2,635.29 2.48%
bitcoin-cash
Bitcoin Cash (BCH) $ 353.52 2.63%
polkadot
Polkadot (DOT) $ 4.81 2.99%
near
NEAR Protocol (NEAR) $ 5.59 8.07%
uniswap
Uniswap (UNI) $ 7.35 8.00%
dai
Dai (DAI) $ 1.00 0.01%
leo-token
LEO Token (LEO) $ 5.84 1.31%
litecoin
Litecoin (LTC) $ 68.33 2.03%
sui
Sui (SUI) $ 1.69 0.42%
internet-computer
Internet Computer (ICP) $ 9.54 4.99%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,765.09 2.66%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.64 0.69%
kaspa
Kaspa (KAS) $ 0.164453 1.70%
aptos
Aptos (APT) $ 8.09 0.92%
pepe
Pepe (PEPE) $ 0.000009 10.75%
bittensor
Bittensor (TAO) $ 518.64 7.11%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.425567 2.93%
ethereum-classic
Ethereum Classic (ETC) $ 20.31 4.74%
monero
Monero (XMR) $ 163.44 1.06%
blockstack
Stacks (STX) $ 2.01 6.38%
first-digital-usd
First Digital USD (FDUSD) $ 0.99849 0.05%
stellar
Stellar (XLM) $ 0.098347 2.40%
immutable-x
Immutable (IMX) $ 1.78 2.05%
ethena-usde
Ethena USDe (USDE) $ 0.999041 0.00%
okb
OKB (OKB) $ 42.26 6.54%
render-token
Render (RENDER) $ 6.35 6.07%
aave
Aave (AAVE) $ 165.59 0.04%
filecoin
Filecoin (FIL) $ 4.09 3.33%
crypto-com-chain
Cronos (CRO) $ 0.08719 2.84%
hedera-hashgraph
Hedera (HBAR) $ 0.061656 4.42%
injective-protocol
Injective (INJ) $ 23.08 2.00%
arbitrum
Arbitrum (ARB) $ 0.617679 2.43%
dogwifcoin
dogwifhat (WIF) $ 2.21 7.84%