U.S. Dollar Rises On Fed Rate Hike Talks, Risk Aversion
May 03 2016 - 10:35PM
RTTF2
The U.S. dollar strengthened against the other major currencies
in the Asian session on Wednesday, after several Fed officials
hinted at June rate hike, and as Asian stocks fell amid renewed
worries about global economic growth.
Fed officials on Tuesday hinted about considering U.S. interest
rate hike at next month's Fed meeting.
Atlanta Fed President Dennis Lockhart said a rate hike at the
next Federal Reserve policy meeting is "a real option" as long as
the economy, inflation and jobs show improvement. Cleveland Fed
President Loretta Mester and San Francisco Fed President John
Williams also supported U.S. rate hike policy.
Crude oil dropped further from recent yearly highs amid
speculation the rally was overdone. The global supply glut shows no
sign of abating, while U.S. crude oil inventories remain near
record highs.
OPEC nations and Russia are expected to keep pumping vast
amounts of oil in order to preserve market share, putting a cap on
oil's advance.
Tuesday, the U.S. dollar fell 0.69 percent against the euro,
0.49 percent against the pound, 0.03 percent against the Swiss
franc and 0.12 percent against the yen.
In the Asian trading, the U.S. dollar rose to a 1-week high of
1.4520 against the pound and a 5-day high of 107.44 against the
yen, from yesterday's closing quotes of 1.4534 and 106.55,
respectively. If the greenback extends its uptrend, it is likely to
find resistance around 1.43 against the pound and 111.50 against
the yen.
Against the euro and the Swiss franc, the greenback advanced to
2-day highs of 1.1477 and 0.9569 from yesterday's closing quotes of
1.1496 and 0.9541, respectively. The greenback may test resistance
near 1.13 against the euro and 0.98 against the franc.
Against the Australian, the New Zealand and the Canadian
dollars, the greenback climbed to nearly a 2-month high of 0.7467,
6-day high of 0.6876 and nearly a 2-week high of 1.2749 from
yesterday's closing quotes of 0.7484, 0.6913 and 1.2723,
respectively. The greenback is likely to find resistance around
0.73 against the aussie, 0.67 against the kiwi and 1.30 against the
loonie.
Looking ahead, PMI reports from major European economies for
April and Eurozone retail sales for March are due to be released
later in the day.
At 6:15 am ET, Germany's Bundesbank President Jens Weidmann is
expected to speak at annual meeting of the Asian Development Bank
in Frankfurt.
In the New York session, U.S. ADP private sector employment data
for April, ISM non-manufacturing PMI data for April, U.S and Canada
trade data for March, U.S. factory orders and durable goods orders
for March and U.S. crude oil inventories data are slated for
release.
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