dollar indexA new round of U.S. economic data reinforced investors’ bets that the Federal Reserve’s (Fed) tightening cycle is coming to an end, even as other central banks continued to raise interest rates to combat soaring inflation, falling to a two-month low on Tuesday. As the U.S. dollar weakens,GBP、EURBoth go strong,GBPIt even returned to the $1.25 barrier, a ten-month high.
ICE, which tracks the dollar against six major currencies, in late U.S. trade dollar index (DXY) fell 0.52 percent to 101.56, the lowest since Feb. 2.
The United States announced that the number of job vacancies fell below 10 million in February, the lowest level in nearly two years, and factory orders continued to decline, as the data showed that the cycle of interest rate hikes was coming to an end, and the dollar was under pressure.
Vassili Serebriakov, currency strategist at UBS, said: “The main trigger is the JOLTS data, which shows that the labor market is slowing down, so we see the dollar lower and keep an eye on yields. The question is: in a risk-off environment, Lower yields have a bigger impact on the dollar? Or a weaker stock market? Seems to be yields that have a bigger impact.”
U.S. 2-year Treasury yields, which reflect Fed rate expectations, fell 12 basis points to 3.86% on Tuesday. The rate plunged nearly 74 basis points in March, the biggest monthly drop since January 2008 during the global financial crisis.
“We’ve got a lot of data to scrutinize this week that either suggests the U.S. economy is resilient enough to sustain the Fed’s continued rate hikes, or that the market is about to break out,” said Juan Perez, head of trading at Monex.
He believes the combination of the banking crisis, poor data and rising oil supply costs could make a rate cut more likely next year.
The interest rate futures market on Tuesday showed that the chances of the Fed raising interest rates by one yard or pausing in May are roughly five or five. The probability of the Fed raising interest rates by 1 yard next month was still as high as 65% on Monday (3rd), and the interest rate futures market also priced in the possibility of the Fed cutting interest rates before the end of December.
GBPIt rose nearly 0.7 percent to $1.2501 today, breaking through a key resistance point and reaching its highest level since June last year.EURIt rose more than 0.5% to $1.0957, a two-month high, as traders believed the European Central Bank (ECB) would raise interest rates further.
UBS strategist Serebriakov sticks to his view that the dollar has peaked, predictingEURAgainst the US dollar will rise to 1.15 US dollars in the second half.
Australian dollarIt fell 0.46% to $0.6750. The Reserve Bank of Australia (RBA) kept the cash rate unchanged at 3.6 percent as expected, breaking a streak of ten rate hikes, with central bank officials saying more time is needed to assess the impact of rate hikes so far and the economic outlook.
US dollar againstJPYDepreciated for two consecutive days, down more than 0.5% to 131.7 JPY。
As of about 6:00 on Wednesday (5th) Taiwan time Price:
- dollar indexCall 101.5698. -0.4873%
- EURExchange rate against US dollar (EUR/USD) 1 EURAgainst $1.0955. +0.5046%
- GBPExchange rate against USD (GBP/USD) 1 GBPAgainst $1.2500. +0.6684%
- Australian dollarExchange rate against U.S. dollar (AUD/USD) 1 Australian dollarAgainst $0.6753. -0.4129%
- US dollar againstCanadian Dollars (USD/CAD) exchange rate quoted 1 US dollar to 1.3445 Canadian Dollars。+0.1191%
- US dollar againstJPY (USD/JPY) exchange rate quoted 1 US dollar to 131.69 JPY。-0.5363%
