Dollar Gains as Traders Push Out First Fed Rate Cut
A dollar gauge advanced to day’s high as traders are now fully pricing in the first interest-rate cut for the year by the Federal Reserve in July, not in June, after US data pointed to solid economic expansion.
The Bloomberg Dollar Spot Index rose as much 0.2%, it traded weaker before the data
US job openings rose to a six-month high while growth at US service providers quickened
“It’s hard to argue with rates staying higher for longer,” said Win Thin, global head of markets strategy at Brown Brothers Harriman. “Next Fed cut has been pushed out to July vs. June pre-data”
“A lot of positives are already in the price of the USD and we still have the NFP on Friday,” said Valentin Marinov, head of G-10 FX strategy at Credit Agricole. “This much could mean that the USD could struggle to break to completely reverse the recent losses”
Treasury yields have been rising so fast that there’s a risk of bond market turmoil resembling the upheaval that led to the resignation of then British Prime Minister Liz Truss, according to Apollo Global Management’s Torsten Slok
EUR/USD fell 0.1% to 1.0376
Inflation expectations of consumers in the euro area increased in November, the European Central Bank said
Euro-area inflation accelerated last month, supporting the ECB’s gradual approach to reducing interest rates, without derailing them altogether
USD/JPY rose 0.4% at 158.19
“Yen selling is likely due to the lack of expectations for a rate hike at the BOJ’s January meeting,” said Takeru Yamamoto, a trader at Sumitomo Mitsui Trust Bank in New York
Barclays sees the BOJ hiking rates in March and October this year, compared with its previous forecast of January and July, due to uncertainty surrounding domestic and overseas politics
GBP/USD fell 0.1% to 1.2505; UK house prices slipped back for the first time in nine months even as the property market enjoyed its best year since the pandemic
USD/CHF advanced 0.4% to 0.9080
Source : Bloomberg
