U.S. Dollar Advances Against Majors
May 09 2017 - 12:12AM
RTTF2
The U.S. dollar firmed against its major counterparts in early
European deals on Tuesday amid rising treasury yields, as French
election risk abated and the Cleveland Fed chief Loretta Mester
warned against delaying the Fed's policy normalisation to check the
risk of overheating of the economy.
Speaking at the Chicago Council on Global Affairs on Monday,
Mester told that the Fed should remain vigilant against falling
behind the curve as the economy continues to make progress in its
goals.
"If we delay too long in taking the next normalization step and
then find ourselves in a situation where the labor market becomes
unsustainably tight, price pressures become excessive and we have
to move rates up steeply, we could risk a recession," she said.
CME Group FedWatch tool shows 88 percent probability of a
quarter point hike to 1.00-1.25 percent at its June 13-14 policy
meeting, up from 79 percent late on Friday.
The benchmark yield on 10-year treasury rose 2.39 percent, while
that of the 2-year equivalent was up by 1.33 percent. Yields move
inversely to bond prices.
The week's key economic reports include producer price inflation
on Thursday, as well as consumer prices and retail sales on Friday,
which would shed more clues about the economy.
The currency has been trading in a positive territory in the
Asian session, with the exception of the pound.
The greenback advanced to 1.0004 against the Swiss franc, its
highest since April 18. The next possible resistance for the
greenback-franc pair is seen around the 1.01 region.
The greenback rose to a 5-day high of 1.0903 against the euro
and near a 2-month high of 113.49 against the yen,from its early
lows of 1.0933 and 113.13, respectively. If the greenback extends
rise,1.08 and 116.00 are possibly seen as its next resistance
levels against the euro and the yen, respectively.
The greenback bounced off to 1.2935 against the pound and 1.3709
versus the loonie, from early lows of 1.2955 and 1.3687,
respectively. The next possible resistance for the greenback is
seen around 1.28 against the pound and 1.38 against the loonie.
The greenback that closed yesterday's trading at 0.6907 against
the kiwi and 0.7382 against the aussie strengthened to a 2-day high
of 0.6881 and a 4-month high of 0.7335, respectively. The greenback
is seen finding resistance around 0.67 against the kiwi and 0.72
against the aussie.
Looking ahead, Canada building permits for March and wholesale
inventories for April are set for release in the New York
session.
At 9:00 am ET, Minneapolis Fed President Neel Kashkari speaks
before the Minnesota High Tech Spring Conference in Minneapolis
Boston Fed President Eric Rosengren gives luncheon speech in New
York City at 12:00 pm ET.
Dallas Fed President Robert Kaplan speaks at the Lower Middle
Market Investment Summit in Dallas at 4:15 pm ET.
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