U.S. Dollar Advances Against Most Majors
June 05 2017 - 5:22AM
RTTF2
The U.S. dollar climbed against its most major counterparts in
the European session on Monday, as treasury yields rose on
increasing prospectus of a Fed rate hike at a meeting next week,
following a rate rise in March.
The probability of a rate hike during the Fed's June meeting has
risen to 95.8 percent, according to CME Group's FedWatch tool.
Economists expect a 25 basis points increase in the Fed's
benchmark overnight interest rate to a range between 1 percent and
1.25 percent at the June 13-14 policy meeting
The benchmark yield on 2-year note rose 1.30 percent, while that
of 10-year equivalent was higher by 2.18 percent. Yields move
inversely to bond prices.
Meanwhile, sentiment remained cautious after the World Bank kept
its outlook for the global economy unchanged, but warned that a
lack of clarity about the size of an expected U.S. fiscal stimulus
and a buildup of emerging-market debt, notably in China, risk
jeopardizing growth around the globe.
Investors await ISM non-manufacturing PMI and factory orders
data due today, followed by weekly jobless claims and wholesale
trade later in the week for more clues about the strength of the
economy.
The currency has been trading higher against its major rivals in
the Asian session, with the exception of the Swiss franc.
The greenback rose back to 110.64 against yen, from its early
near 3-week low of 110.31. The next possible resistance for the
greenback-yen pair is seen around the 112.00 region.
The latest survey from Nikkei showed Japan's services sector
activity continued to expand in May with a PMI score of 53.0.
That's up from 52.2 in April, and it moves farther above the
boom-or-bust line of 50 that separates expansion from
contraction.
The greenback climbed to 1.1235 against the euro and 0.9661
against the Swiss franc, off its early low of 1.1283 and a 7-month
low of 0.9620, respectively. If the greenback extends rise, 1.11
and 0.98 are possibly seen as its next resistance levels against
the euro and the franc, respectively.
Reversing from an early 5-day low of 1.3462 against the loonie,
the greenback bounced off to 1.3493. Further uptrend may see the
greenback challenging resistance around the 1.36 area.
On the flip side, the greenback weakened to a 5-day low of
1.2916 against the pound, off its early high of 1.2855. The
greenback is poised to target support around the 1.32 region.
Survey data from IHS Markit and Chartered Institute of
Procurement & Supply showed that the UK service sector activity
growth eased more-than-expected in May to the weakest level in
three months.
The Markit/CIPS services Purchasing Managers' Index dropped to
53.8 in May from 55.8 in April. Economists had expected the index
to fall to 54.8.
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