U.S. Dollar Extends Rise As Fed Rate Cut Worries Fade
April 01 2024 - 11:45PM
RTTF2
The U.S. dollar strengthened against other major currencies in
the Asian session on Tuesday, as trader's speculation on the
Federal Reserve interest rate cut faded.
Data on Monday showed that the U.S. manufacturing sector
expanded in March for the first time since September 2022.
Data from the Institute for Supply Management showed that the
manufacturing PMI jumped to 50.3 in March from 47.8 in February,
with a reading above 50 indicating growth in the sector. Economists
had expected the index to inch up to 48.4.
The robust manufacturing PMI data led to the rise of Treasury
yields, with the yield on the benchmark ten-year note touching 4.31
percent, boosted the U.S. dollar.
The data is "along the lines of what we would like to see," Fed
Chair Jerome Powell said on Friday at a conference and repeated the
central bank is no hurry to cut interest rates. He also
acknowledged the risks of leaving interest rates where they are
now.
The U.S. dollar started trading higher against its major rivals
from March 29th, 2024.
In the Asian trading now, the U.S. dollar rose to a 1-1/2-month
high of 1.0729 against the euro, a 6-day high of 151.80 against the
yen and a 5-day high of 0.9065 against the Swiss franc, from
yesterday's closing quotes of 1.0743, 151.63 and 0.9041,
respectively. If the greenback extends its uptrend, it is likely to
find resistance around 1.06 against the euro, 153.00 against the
yen and 0.91 against the franc.
Against the pound and the Canadian dollar, the greenback edged
up to 1.2541 and 1.3584 from yesterday's closing quotes of 1.2550
and 1.3569, respectively. On the upside, 1.24 against the pound and
1.37 against the loonie is seen as the next resistance level for
the greenback.
Looking ahead, Manufacturing PMI reports for March from U.K. and
various European economies, U.K. mortgage approvals data for
February, are due to be released in the European session.
At 8:00 am ET, Destatis is set to release Germany's flash
inflation figures for March. Economists forecast consumer price
inflation to ease to 2.2 percent from 2.5 percent in February.
In the New York session, U.S. factory orders for February is
slated for release.
At 10:10 am ET, Federal Reserve Board Governor Michelle Bowman
will speak virtually on "Bank Mergers and Acquisitions, and De Novo
Bank Formation: Implications for the Future of the Banking System"
before the Workshop on the Future of Banking hosted by the Federal
Reserve Bank of Kansas City, in Washington D.C., U.S.
At 12:00 pm ET, Federal Reserve Bank of New York President John
Williams will moderate a discussion with Jeremy Siegel, professor
of finance at the Wharton School of the University of Pennsylvania,
before the Economic Club of New York, in New York, U.S.
Five minutes later, Federal Reserve Bank of Cleveland President
Loretta Mester speaks on the economic outlook before the Cleveland
Association for Business Economics and Team NEO Luncheon, in
Cleveland, U.S.
At 1:30 pm ET, Federal Reserve Bank of San Francisco President
Mary Daly will participate in hybrid fireside chat in partnership
with the Henderson Chamber of Commerce, Latin Chamber of Commerce
Nevada, and Vegas Chamber of Commerce, in Las Vegas, in U.S.
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