The dollar was up on Wednesday morning in Asia
2022.07.13 07:45
Budrigannews.com – The dollar was up on Wednesday morning in Asia, with investors wary a record-high reading in 40 years could fuel interest rate hike expectations from the U.S. Federal Reserve.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies edged up 0.10% to 108.18 by 12:24 AM ET (4:24 AM GMT).
The USD/JPY pair edged up 0.16% to 137.09.
The AUD/USD pair gained 0.25% to 0.6773, and the NZD/USD pair edged down 0.11% to 0.6129. The Reserve Bank of New Zealand (RBNZ) raised the interest rates by 50 basis points to 2.5% earlier in the day.
“There was no real change in tone,” BNZ strategist Jason Wong told Reuters on the RBNZ decision, adding that left U.S. CPI likely to drive the kiwi’s next move. “We’re at the whim of the U.S. dollar.”
The USD/CNY pair inched up 0.01% to 6.7258, while GBP/USD pair edged up 0.19% to 1.1908. Official data released earlier in the day showed that China’s exports in the first six months of 2022 grew 13.2% year-on-year, adding to markets’ confidence that the world’s second-largest country is seeing economic recovery as the COVID-19 curbs eased.
The EUR/USD inched up 0.03% to 1.0039. It is down nearly 12% this year and fell to a 20-year low on Tuesday as the war in Ukraine has triggered an energy crisis that would hurt the economic outlook.
In the U.K., eight Conservatives are vying to succeed Johnson.
“The combination of slow growth, debt, and high inflation are likely to prove very tricky for the new Tory leadership,” Rabobank senior strategist Jane Foley told Reuters. “Sterling may suffer a lack of fresh direction until the new PM is in place.”
Investors now await U.S. Consumer Price Index (CPI) for more clues on the U.S. Federal Reserve’s monetary policy path, which is due later in the day. Analysts predicted that the print would hit a 40-year high in June from a year earlier, the largest jump since 1981.
“I think the U.S. dollar will keep increasing if the U.S. CPI is stronger than expected,” Commonwealth Bank of Australia (OTC:CMWAY) strategist Joe Capurso told Reuters. “There’s definitely a very good chance that the euro falls below parity tonight.”
