The U.S. Dollar Index that tracks the greenback against a basket of other currencies was down 0.23% to 105.27
The dollar was down on Wednesday morning in Asia, although investors bet on aggressive interest rate hikes from the U.S. Federal Reserve meeting.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies was down 0.23% to 105.27 by 4:27 AM GMT.
The USD/JPY pair was down 0.29% to 135.09. The pair hit a fresh 24-year low. The AUD/USD pair jumped 0.48% to 0.6900, and the NZD/USD pair edged up 0.21% to 0.6226.
The USD/CNY pair was down 0.28% to 6.7224, while GBP/USD pair gained 0.18% to 1.2014.
Official data showed on Wednesday that China’s industrial production increased 0.7% in May year-on-year, which was better than market expectations. However, the new COVID-19 outbreaks and the following curbs added worries about the second largest country’s uncertain recovery path.
The Fed will announce its policy decisions later in the day. The central bank is expected to raise interest rates by 75 basis points as the U.S. consumer price index (CPI) surged 8.6% year-on-year in May, the largest in 40 years.
Given current aggressive market pricing, there is a risk the (Fed)is deemed ‘not hawkish enough’, pulling down U.S. interest rates and the USD modestly after the meeting, said CBA analysts in a morning note.
In our view, it will take more than a 75bp hike tomorrow or a nod to a 100bp hike for the FOMC’s July meeting, to push the USD up significantly after the FOMC meeting, they said.
Investors now also await policy decisions from global central banks. The Bank of England will hand down its policy decision on Thursday, and the Bank of Japan will hand it down the day following.
The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.
Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.
Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.