Dollar Up, Investors Keep an Eye on Central Banks’ Moves
2022.07.19 06:53
By Zhang Mengying
Investing.com – The dollar was up on Tuesday morning in Asia. It hovered on Tuesday just above a one-week low as a percentage-point Federal Reserve interest rate hike this month may be less than expected.
The US Dollar Index that tracks the greenback against a basket of other currencies edged up 0.11% to 107.49 by 11:34 PM ET (3:34 AM GMT).
The USD/JPY pair inched down 0.02% to 138.10.
The AUD/USD pair gained 0.31% to 0.6833, and the NZD/USD pair was up 0.21% to 0.6164.
The USD/CNY pair inched up 0.07% to 6.7479, while GBP/USD pair inched down 0.09% to 1.1944.
Data last week showed that U.S. inflation was already at a four-decade high and continued to accelerate in June, and investors bet on supersized easing. However, figures from last Friday showed an easing of consumer inflation expectations to the lowest in a year.
Traders in futures contracts shifted their bets to be in favor of a 0.75-percentage-point increase at the upcoming meeting, who had been leaning toward a full-percentage-point interest rate rise.
Investors are keeping an eye on the Nord Stream 1 pipeline that is scheduled to reopen Thursday following maintenance.
Despite the uncertainty, the European Central Bank is to raise interest rates on Thursday for the first time in more than a decade. Investors bet on a half-point hike due to heated inflation.
“The balance of risks is tilted to a weaker EUR (whereas) the path of least resistance for the USD is to continue trending higher because of the poor global growth outlook,” Commonwealth Bank of Australia (OTC:CMWAY) analyst Carol Kong wrote in a client note, referring to the dollar’s role as a safe haven.
