Dollar Strengthens Slightly, Fed Minutes Awaited
The US dollar strengthened slightly against most major currencies on Monday (June 7th). This strengthening occurred as the market monitored the OPEC+ agreement to increase oil production quotas and awaited the minutes of the Federal Reserve's June policy meeting, which will be released this week.
The Bloomberg Dollar Spot Index edged up 0.1% ahead of the European session, hovering around 100.707. Last week, the dollar index weakened 0.3% after weaker-than-expected US jobs data. Pressure on the dollar also emerged after Fed Chairman Kevin Warsh stated that inflationary pressures were easing.
However, the current dollar strengthening is seen as more of a consolidation than the start of a new rally. OCBC analyst Christopher Wong believes the weaker US data has reduced the dollar's momentum, but not enough to warrant a full-fledged turnaround. Market focus remains on upcoming US economic data and comments from Fed officials.
The Japanese yen and New Zealand dollar were the most pressured currencies among the G10 group. USD/JPY rose 0.4% to 161.98, while NZD/USD fell 0.4% to 0.5690. Yen traders remained wary of the risk of Japanese intervention and the expiration of options worth nearly US$8 billion, which could increase volatility.
In the bond market, the 10-year US Treasury yield fell 2 basis points to 4.47% after cash markets reopened following the US holiday. Meanwhile, AUD/USD fell slightly to 0.6931, and EUR/USD weakened to 1.1429. Investors are now awaiting Eurozone retail sales and producer price data, while looking for clearer clues from the Fed minutes regarding the direction of interest rates. (asd)*
Source: Newsmaker.id
