US Dollar Extends Slide Amid Bets On Fed Rate Hike Pause
April 13 2023 - 10:41PM
RTTF2
The U.S. dollar extended its early slide against other major
currencies in the Asian session on Friday, as traders' bet on the
view that the Federal Reserve was nearing to pause its interest
rate-hike cycle after data showed an unexpected decline in U.S.
producer prices on Thursday.
Data from the Labor Department showed on Thursday, the producer
price index fell by 0.5 percent in March following a revised
unchanged reading in February. Economists had expected producer
prices to come in unchanged compared to the 0.1 percent dip
originally reported for the previous month.
The report also showed the annual rate of producer price growth
slowed dramatically to 2.7 percent in March from 4.9 percent in
February. Economists had expected the pace of growth to slow to 3.0
percent.
Separate data showed that first-time claims for U.S.
unemployment benefits rose more than expected in the week ended
April 8.
The report said initial jobless claims climbed to 239,000, an
increase of 11,000 from the previous week's unrevised level of
228,000. Economists had expected jobless claims to rise to
232,000.
The U.S. dollar started falling against its major rivals after
the poor economic data from the U.S. in the New York session on
Thursday.
In the Asian session today, the U.S. dollar touched 1.1075
against the euro, its lowest level since April 2022. The pair was
valued at 1.1046 at Thursday's close. The eur/usd pair may find its
support around the 1.12 area.
The greenback touched 1.2546 against the pound, it lowest level
since June 2022. At yesterday's close, the greenback was trading at
1.2522 against the pound. On the downside, 1.27 is seen as the next
support level for the greenback.
Against the Canadian and the New Zealand dollars, the greenback
dropped to a 2-month low of 1.3317 and an 8-day low of 0.6315 from
yesterday's closing quotes of 1.3336 and 0.6295, respectively. The
next possible support level for the greenback is seen around 1.32
against the loonie and 0.65 against the kiwi.
Against the yen, the Swiss franc and the Australian dollar, the
greenback edged down to 132.26, 0.8874 and 0.6794 from yesterday's
closing quotes of 132.56, 0.8891 and 0.6781, respectively. If the
greenback extends its downtrend, it is likely to find support
around 128.00 against the yen, 0.87 against the franc and 0.70
against the aussie.
Looking ahead, Switzerland's producer and import prices for
March is due to be released at 2:30 am ET.
Canada final manufacturing sales data for February, U.S. retail
sales data, export and import prices, industrial production, all
for March, U.S. University of Michigan's preliminary consumer
sentiment index for April and U.S. Baker Hughes rig count data are
due to be released in the New York session.
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