U.S. Dollar Trades Higher On Fed Hike Hopes
08 Gennaio 2018 - 08:30AM
RTTF2
The U.S. dollar strengthened against its major counterparts in
the European session on Monday, as a steady improvement in the U.S.
labor market kept alive hopes for a Fed rate hike at its March
meeting.
Fed funds futures are pricing in a 61.6 percent chance for a
quarter-point rate increase to 1.50 percent - 1.75 percent in
March, according to CME.
Comments from Fed officials supporting rate hike also
underpinned the currency.
The U.S. job market is overall strong, which makes it
appropriate for a gradual increase in the fed funds rate at this
point, Cleveland Fed President Loretta Mester told CNBC on
Friday.
"I think we're basically at maximum employment from the view of
monetary policy," she added.
Speaking at an American Economic Association conference, San
Francisco Fed President John Williams suggested that three rate
hikes this year looks appropriate in the light of strengthening
economy. "We're in a pretty good situation: the economy is doing
great, everyone expects us to raise rates gradually," he said.
With today's economic calendar being light, investors await U.S.
import prices, producer prices, consumer confidence and retail
sales numbers due this week for more direction.
The currency has been trading in a positive territory in the
Asian session.
The greenback climbed to a 10-day high of 1.1983 against the
euro, compared to 1.2027 hit late New York Friday. The greenback is
likely to find resistance around the 1.18 region.
Data from Destatis showed that German factory orders declined
more than expected in November.
Factory orders decreased 0.4 percent month-on-month, reversing a
revised 0.7 percent rise in October. Orders were forecast to drop
0.2 percent.
The greenback advanced to more than a 2-week high of 113.39
against the yen and held steady thereafter. The pair ended last
week's deals at 113.02.
The greenback reached as high as 0.9784 against the franc and
moved sideways thereafter. If the greenback rises further, 0.99 is
possibly seen as its next resistance level.
The greenback edged up to 1.3524 against the pound, off its
early 5-day low of 1.3585. The greenback is seen finding resistance
around the 1.34 area.
Reversing from an early low of 0.7873 against the aussie, the
greenback hit a 2-day high of 0.7827. On the upside, 0.77 is likely
seen as the next resistance for the greenback.
Survey from the Australian Industry Group showed that
Australia's construction sector continued to expand in December,
although at a much slower rate, with a Performance of Construction
Index score of 52.8.
That's down sharply from 57.5 in November, although it remains
above the boom-or-bust line of 50 that separates expansion from
contraction for the 11th consecutive month.
U.S. consumer credit for November is set for release at 3:00 pm
ET.
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