© Reuters The dollar’s decline continues before important economic data
FXNEWSTODAY – The US dollar fell in the European market on Tuesday against a basket of global currencies, extending its losses for the second day in a row, as the market still doubts the presence of two additional increases in interest rates of the Federal Reserve during the next few meetings.
In order to obtain more evidence about the resumption of the cycle of raising US interest rates, starting from the next July meeting, investors are awaiting, at successive times today, important economic data from the United States.
The American
The dollar index decreased by about 0.25% to the level of 102.48 points, from the opening level of today’s trading at 102.73 points, and it recorded the highest level at 102.80 points.
On Monday, the index lost 0.1%, its first loss in the last three days, to give up the highest level in a week at 103.17 points.
Opinions and analytics
“At this point the markets are not convinced that the FOMC can raise interest rates twice more this year,” said Carol Kong, currency analyst at the Commonwealth Bank of Australia.
“Two additional rate hikes by the Fed have not been fully priced into the market,” said Masafumi Yamamoto, chief currency analyst at Mizuho Securities.
Futures pricing for the possibility of raising US interest rates by 25 basis points during the next July 26 meeting is currently stable at 76%, and futures pricing for the possibility of keeping US interest rates without any change, currently stable at 24%.
Morgan Stanley now expects the Federal Reserve to raise interest rates by 25 basis points at the next July meeting, bringing the final interest rate to 5.50%.
Economic data
In order to re-price the above contracts, investors are awaiting, at successive times today, the issuance of a number of important economic data in the United States, on durable goods orders, on the housing sector, and on levels of confidence in the US economy.
By 12:30 GMT, durable goods orders are expected to decline by 0.8% in May from a rise of 1.1% in April, excluding transportation items expected to rise by 0.0% from a decline of 0.3% the previous month.
And by 13:00 GMT, the house price index is expected to rise by 0.5% in April, from a rise of 0.6% in March, and by 14:00 GMT, new home sales are expected to reach 677 thousand in May, from 683 thousand in April. /April.
And at 14:00 GMT, the CB Consumer Confidence Index for June will also be released, expected to reach 103.9 points, from 102.3 points in May.
Masafumi Yamamoto, chief currency analyst at Mizuho Securities, said that if US economic data comes out on the strong side, additional pricing of the two price hikes will lead to a rally in the US dollar.
2023-06-27 12:20:00
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