© Reuters. FILE PHOTO: US dollar bills are pictured in this illustration taken February 14, 2022. REUTERS/Dado Ruvic/Illustration
By Herbert Lash and Harry Robertson
NEW YORK/LONDON, April 17 (Reuters) – The dollar rose on Monday, after the April survey of New York factory activity rose for the first time in five months and boosted expectations that the Federal Reserve would hike. interest rates in May.
* Also buoyed by a report showing US single-family homebuilder confidence improved for the fourth straight month in April.
* The , which measures the greenback’s performance against a basket of six currencies, was up 0.413% after reports that the Empire State Index of Current Business Conditions rose to a reading of 10.8 this month, from -24.6 in March and against the expectations of economists polled by Reuters of -18.0 points.
* The New York Fed survey gauge of new orders jumped 46.8 points to 25.1 this month, while the gauge of shipments rose 37.3 points to 23.9 points.
* “It’s the best reading since last July with a strong rise in orders and has sent the dollar rallying,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
* “It looks like the economy is still growing above what the Fed says its speed limit is,” he said. “The market is underestimating the chances of another rate hike after May. Now the market says the Fed is going to cut later, but I think the economy is proving resilient.”
* Rate futures showed the probability of the Fed raising the cost of credit to a range of 5.00%-5.25% when the central bank wraps up a two-day meeting on May 3 rose to 84.1 % from 78% on Friday, CME Group’s (NASDAQ:) FedWatch tool showed.
* Meanwhile, the euro was down 0.66% at $1.0926. Traders expect further interest rate hikes from the European Central Bank.
* The yen was down 0.45% at 134.40 to the dollar as the Bank of Japan maintained its easy money policies, helping the dollar hit its highest level since March 15.
* The new Governor of the Bank of Japan, Kazuo Ueda, made it clear last week that the country will maintain a dovish stance in its monetary policy and keep interest rates at ultra-low levels for the time being.
* For its part, the pound sterling was trading at $1.2374, a decrease of 0.31%.
(Additional reporting by Harry Robertson in London; editing in Spanish by Ricardo Figueroa, Manuel Farías and Aida Pelaez-Fernandez)
