© Reuters Dollar rises before Jerome Powell’s remarks
FXNEWSTODAY – The US dollar rose in the European market on Wednesday against a basket of global currencies, on the verge of achieving its first gain in the last three days, with renewed activity in buying the currency as the best investment available.
Strong data in the United States reinforced the prospects for the Federal Reserve to raise interest rates next July, after a temporary pause during the current June meeting.
In order to re-evaluate these possibilities, investors are awaiting, later today, the speech of Federal Reserve Chairman Jerome Powell, which is expected to include signs about the future of raising interest rates in the United States.
The American
The dollar index rose by about 0.2% to the level of 102.70 points, from the opening level of today’s trading at 102.51 points, and recorded the lowest level at 102.47 points.
On Tuesday, the index lost 0.25%, its second consecutive daily loss, and pared a loss of 0.5% after the release of strong economic data in the United States.
Strong data
The data showed that consumer confidence in the United States rose in June to the highest level in nearly a year and a half, with a higher-than-expected rise in new home sales in May, and an unexpected rise in US home prices in April. April.
The chief currency analyst at the National Australia Bank, Rodrigo Cattrell, said that the US data is fueling the issue of “sectoral recession” that manipulates different time periods, which makes the Federal Reserve’s task of taming inflation more difficult, and that it needs to continue on the path of monetary tightening.
American interest
Following these data, futures pricing for the possibility of raising US interest rates increased by 25 basis points during the next July 26 meeting to 77%, and futures pricing for the possibility of keeping US interest rates unchanged fell to 23%.
Jerome Powell
In order to re-price the above contracts, investors are awaiting, later today, the speech of the Federal Reserve Chairman, “Jerome Powell” at the forum organized by the European Central Bank in the Portuguese city of Sintra.
As Powell’s comments are expected to include new signals about the battle for inflation in the United States and the future of raising US interest rates during this year.
“We expect Powell to reaffirm his hawkish stance on monetary policy, although we suspect his comments will support the FOMC’s interest rate outlook,” said Carol Kong, currency analyst at the Commonwealth Bank of Australia.
2023-06-28 12:18:00
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