U.S. Dollar Lower As Treasury Yields Fall
14 Aprile 2022 - 6:33AM
RTTF2
The U.S. dollar weakened against its major counterparts in the
Asian session on Thursday, as U.S. treasury yields dropped amid
signals that inflation may have peaked and investors awaited the
European Central Bank's monetary policy decision later today for
rate hike outlook.
Federal Reserve board member Christopher Waller said on
Wednesday that the central bank will continue with its plan for
rate hikes to curb inflation even though the pace of price
increases is likely to have peaked.
The economy is strong enough to support higher rates, enabling
the Fed to move prices down without causing a recession, Waller
added.
Investors await a slew of data including retail sales, initial
jobless claims, and the University of Michigan's consumer sentiment
index due later today for more direction.
With euro area inflation touching an all-time high of 7.5
percent last month, the ECB could end the asset purchase program
early in the third quarter and open the door for a first rate hike
later this year.
Risk sentiment improved after China's cabinet signaled upcoming
cuts to banks' reserve requirement ratios and interest rates to
counter the impact of Covid-19 and boost the recovery and growth of
consumption.
The greenback edged down to 0.9324 against the franc, from a
high of 0.9353 it touched at 9 pm ET. Against the kiwi, it reached
as low as 0.6834. The currency is likely to locate support around
0.90 against the franc and 0.70 against the kiwi.
The greenback slipped to a 2-day low of 125.10 against the yen
and a 9-day low of 1.3147 against the pound, following its prior
highs of 125.70 and 1.3100, respectively. The greenback is seen
finding support around 119.00 against the yen and 1.33 against the
pound.
The greenback touched a 3-day low of 1.0923 against the euro and
a 1-week low of 1.2541 versus the loonie, off its previous highs of
1.0883 and 1.2569, respectively. The next possible support for the
greenback is seen around 1.12 against the euro and 1.23 versus the
loonie.
The greenback, however, climbed to 0.7442 versus the aussie,
after dropping to 0.7468 earlier in the session. If the dollar
rises further, 0.72 is likely seen as its next resistance
level.
Looking ahead, the European Central Bank will announce interest
rate decision at 7:45 am ET. The ECB is expected to hold its main
refi rate at a record low zero percent and the deposit rate at
-0.50 percent.
U.S. weekly jobless claims for the week ended April 9, business
inventories data for February, University of Michigan's preliminary
U.S. consumer sentiment index for April, retail sales and export
and import prices for March are due out in the New York
session.
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