The dollar has remained supported but it has also eased. This is against a four-month high when compared to the currency basket. This is also ahead of the Federal Reserve meeting. This is expected to point to another two or even three rate hikes later on in the year. When you look at the US dollar index you will find that this measures the greenback’s own strength against six other major currencies. This was down by a total of 0.21%, meaning that it dropped to 92.09. This was on Tuesday and it also means that this is the strongest that it has been since January 9th.
Take advantage of leveraged crypto trading and earn profits on the way up and down! Click here to get started.
The demand for the dollar has continued to be undermined after there was a lot of data released regarding US factories. Data also showed that inflammatory prices are rising. Another report that was released earlier this week showed that the FED’s preferred measure accelerated to the highest that it has ever been in more than a year. The data from the last week however showed that wages have grown at their fastest pace in the last 11 years. This all happened in the last quarter and it is interesting to say the least. When you look at rising inflation you’ll see that this could be what it takes to push the FED forward. It could also raise a ton of interest at a much faster rate when compared to what was originally expected.
The FED is expected to keep the interest rates that they have on hold. The conclusion of the policy meeting is going to be held later and they are expected to line up the next rate hike. This is going to happen in June. Markets are also looking ahead to the US employment report for April as well. This could provide a ton of signs that there is strength yet in the strongest economy in the world. The dollar edged even lower when compared to the yen and the USD/JPY dropped by 0.07%. This eventually fell to 109.77. Still, that being said, this is close to the three-month high of 109.91. This was actually set overnight and that makes the whole thing way more interesting.
The Euro was even higher than this and the Euro and US Dollar ratio rose by over 0.3%. On top of that, it also made a comeback from the low on Tuesday. This is the weakest that it has been since the 11th of Jan. Traders all across the world were trying to look ahead to try and find some preliminary data regarding the Eurozone. They were also trying to find some more first-quarter growth that day as well. This is expected to show that growth has slowed by a significant amount when compared to the start of the year.
A weak reading would also show that the European Central Bank would start to scale back its own stimulus program. This is said to happen in the next couple of months but nothing is certain as of yet. The pound is still closed to a four-month low and the GBP-USD really is at 1.3619. The data on Tuesday showed that activity for the UK manufacturing industry grew at the slowest rate possible over the last 17 months. This is not good news at all, but it does mean that data is being released for traders to work from.
Of course, you’ll also find that the report showed investors slash their expectations. There is said to be a rate hike from the Bank of England and this is due to be announced at their upcoming meeting. That being said, they are also going to talk about the overall economic growth. This however is said to be nearing stagnation in the very first quarter. When you look at the Australian dollar you will find that this has gained a ton of traction and that this rose by around 0.44%. This is after it fell overnight to an 11-month low.