Dollar rally breathes as markets expect Fed policy steps
March 21, 2014 8:05 am
The US dollar glided close to three-week peak versus a basket of major currencies on Friday, but might struggle to prolong gains as investors anticipated more clarity on the Federal Reserve’s policy path.
Fed officials including Richard Fisher, James Bullard, and Narayana Kocherlakota will talk on Friday, following Fed Chair Janet Yellen shocked markets mid-week by proposing the possibility of increasing interest rates early next year.
US yields surged higher as markets carried forward the risk of a Fed rate increase by April. The dollar index last settled at 80.192, near from 80.354 high, a level not seen since late February. However, they noticed most of the Fed speakers are generally on the hawkish end of the stretch. On Thursday, the US figures was mixed but a bounce in factory activity in the Mid-Atlantic region upheld hope the economy might be recouping strength after being cramped by harsh weather.
The euro moved at $1.3777, which plumbed a two-week low of $1.3749. It was on trail to post a 1.0% decline this week.
Not backing the common currency, European Central Bank Executive Board Member Sabine Lautenschlaeger said rates would remain low or might go lower for a prolonged period. Versus the yen, the euro slacked to ¥141.07, almost near the lower-end of this week’s ¥140.46-141.97 scope.
The US dollar battled to make additional gains on the Japanese currency after it excelled at 102.69 on Wednesday, previously 102.39. The greenback also lost steam versus the Canadian and Australian dollars. It last settled at C$1.1237 following it hit a 4-1/2 year peak of C$1.1279, while the Aussie blew above 90 U.S. cents, previously 0.8995.
Trading in Asia is anticipated to be subdued with Japanese financial markets closed for a holiday. There is little in the way of main economic figures out of Asia on Friday even though investors will keep a close eye on the yuan, which tumbled to its lowest in more than a year at 6.2334 per dollar.
The Chinese currency is facing the outlook of posting its largest weekly loss since 1992 following the People’s Bank of China last weekend doubled the currency’s trading range to 2% on either side of the midpoint it sets every day.
Markets, already bothered on the slower growth in the world’s second largest economy, worry the sharp plunge in the yuan could add more pressure on Chinese companies burdened with foreign currency debt.
The material has been provided by InstaForex Company – www.instaforex.com
The US dollar glided close to three-week peak versus a basket of major currencies on Friday, but might struggle to prolong gains as investors anticipated more clarity on the Federal Reserve’s policy path.
Fed officials including Richard Fisher, James Bullard, and Narayana Kocherlakota will talk on Friday, following Fed Chair Janet Yellen shocked markets mid-week by proposing the possibility of increasing interest rates early next year.
US yields surged higher as markets carried forward the risk of a Fed rate increase by April. The dollar index last settled at 80.192, near from 80.354 high, a level not seen since late February. However, they noticed most of the Fed speakers are generally on the hawkish end of the stretch. On Thursday, the US figures was mixed but a bounce in factory activity in the Mid-Atlantic region upheld hope the economy might be recouping strength after being cramped by harsh weather.
The euro moved at $1.3777, which plumbed a two-week low of $1.3749. It was on trail to post a 1.0% decline this week.
Not backing the common currency, European Central Bank Executive Board Member Sabine Lautenschlaeger said rates would remain low or might go lower for a prolonged period. Versus the yen, the euro slacked to ¥141.07, almost near the lower-end of this week’s ¥140.46-141.97 scope.
The US dollar battled to make additional gains on the Japanese currency after it excelled at 102.69 on Wednesday, previously 102.39. The greenback also lost steam versus the Canadian and Australian dollars. It last settled at C$1.1237 following it hit a 4-1/2 year peak of C$1.1279, while the Aussie blew above 90 U.S. cents, previously 0.8995.
Trading in Asia is anticipated to be subdued with Japanese financial markets closed for a holiday. There is little in the way of main economic figures out of Asia on Friday even though investors will keep a close eye on the yuan, which tumbled to its lowest in more than a year at 6.2334 per dollar.
The Chinese currency is facing the outlook of posting its largest weekly loss since 1992 following the People’s Bank of China last weekend doubled the currency’s trading range to 2% on either side of the midpoint it sets every day.
Markets, already bothered on the slower growth in the world’s second largest economy, worry the sharp plunge in the yuan could add more pressure on Chinese companies burdened with foreign currency debt.
The material has been provided by InstaForex Company – www.instaforex.com
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