Dollar rises on positive US credit survey, pound sterling reaches one-year high ahead of BOE meeting

The dollar rose on Tuesday after a survey showed that credit conditions in the United States were less bleak than expected, while the pound sterling touched its highest level in a year amid expectations that the Bank of England will raise interest rates this week.

Currencies were not affected much by data showing a sharp contraction of Chinese imports in April on an annual basis, with exports growing at a slower pace in March.

The Chinese yuan in foreign markets fell 0.1 percent to 6.9282 yuan per dollar, and the yuan lost in domestic transactions by the same percentage, recording 6.9218 yuan per dollar.

“There have been doubts about the sustainability of last month’s strong trade numbers and it appears to be the case so far,” said Matt Simpson, senior market analyst at City Index.

He added, “This could fuel fears of slowing growth, especially given the weak PMI in April.”

The Australian dollar rose 0.03 percent to $0.6783, close to Monday’s three-week high of $0.6804.

The New Zealand dollar fell 0.08 percent to $0.634, but it did not stray from its one-month high of $0.63585 recorded in the previous session.

The dollar index settled at around 101.44, giving up some of its early gains during Tuesday’s trading session.

The Japanese yen rose about 0.15 percent to 134.92 yen per dollar.

The pound sterling reached $ 1.2618 in its latest trading, not far from the highest level in a year recorded in the last session at $ 1.2668 before the monetary policy meeting at the Bank of England on Thursday. The central bank is expected to raise interest rates to 4.5 percent as part of its attempts to curb the highest level of inflation among all advanced economies.

It is noteworthy that gold prices moved in a narrow range, on Tuesday, before the US inflation data that investors are looking forward to in search of clues to the path of the Federal Reserve’s policy.

Gold in spot transactions remained unchanged at $2,023.41 an ounce (an ounce), and by 02:32 GMT, US gold futures fell 0.2 percent to $2,030.10.

US consumer price data is due on Wednesday.

Ajay Kedia, director at Kedia Commodities in Mumbai, said that if the inflation report was issued in a way that fuels fears of raising interest rates again in June, gold prices may eventually fall to a level between $1950 and $1920.

Bullion is a hedge against inflation, but high interest affects the attractiveness of non-return assets.

Dealers are currently betting 92 percent that the US central bank will keep interest rates at their current level in June.