Precise Investors Editorial Team
It was on track for a weekly gain of more than 1%, which would mark its strongest performance in more than four months
The dollar was poised on Friday to cap its strongest weekly performance since October, buoyed by a run of better-than-expected economic data, a more hawkish U.S. central bank outlook and as global tensions kept markets on edge.
Overnight, the dollar got an added lift after data showed the number of Americans filing new applications for unemployment benefits fell more than expected last week, underscoring labour market stability.
Against other currencies, the dollar hovered near Thursday’s one-month high and was last at 97.89. It was on track for a weekly gain of more than 1%, which would mark its strongest performance in more than four months.
It wouldn’t surprise me if the U.S. dollar keeps lifting for a while longer, said Joseph Capurso, a strategist at Commonwealth Bank of Australia, citing hawkishness from this week’s Fed minutes which showed several policymakers were open to rate hikes if inflation proved sticky.
The focus for local markets now turns to the release of the U.S. core PCE price index and advance fourth quarter GDP figures later in the day, which could drive the next move in the currency.
Investors continue to price in roughly two central bank rate cuts this year, though expectations for such a move in June have dipped to a roughly 58% chance from 62% a week ago, according to the CME FedWatch tool.
The big argument within the Fed is whether or not to proactively lower rates to support the job market, or to keep rates higher for longer in order to fight inflation, said Chris Zaccarelli, chief investment officer for Northlight Asset Management, adding that Friday’s PCE report will add to the debate.
Comments (0)
Average Rating: No ratings yet/5 (0 reviews)
No comments yet. Be the first to comment!