Written by Uncle Banerjee
Singapore, February 16 (Reuters) – The dollar was firm on Friday, posting its fifth consecutive week of gains, while the yen was trading in a psychologically important The dollar was traded at the 150 yen level.
dollar index = USDThe U.S. currency’s exchange rate against the dollar against six major rivals rose 0.09% to 104.35 on Friday, after falling 0.4% on Thursday. The index is expected to rise 0.2% for the week, marking its fifth consecutive increase.
The dollar fell on Thursday following mixed U.S. economic data. retail sales Sales at car dealerships and gas stations fell more than expected in January.
In a separate report, the number of first-time claims for state unemployment benefits for the week ending February 10 fell by a seasonally adjusted 8,000 to 212,000, further showing that the U.S. labor market remains tight. Corroborated.
“We’re starting to see some softening in U.S. economic activity, and we’re seeing a lull in the dollar’s momentum,” said Christopher Wong, currency strategist at OCBC in Singapore.
“A bearish PPI reading today will likely reduce USD easing. However, market-wide expectations regarding the timing and size of the Fed’s first rate cut will continue to drive volatility in foreign exchange markets. ”
Traders are now pricing in an 80% chance of a June rate cut, according to the CME FedWatch tool, after a series of positive economic data dashed persistent hopes that the Fed would cut rates early and deeply.
Markets initially priced in March as the start of the Fed’s easing cycle.
Traders currently expect a rate cut of 94 basis points (bp) this year, close to the Fed’s own easing forecast of 75 bps and significantly more than the 160 bps rate cut expected by the end of 2023. low.
Atlanta Fed President Rafael Bostic said Thursday that the U.S. central bank has made significant progress in reducing inflation pressures, but continued risks mean it is not yet ready to seek rate cuts. Stated.
“We will soon consider the appropriate time to ease monetary policy restrictions,” Bostic said.
“A strong labor market and macroeconomy now provide an opportunity to implement these policy decisions without oppressive urgency,” he added.
Investors’ attention has been focused on comments from policymakers, with Federal Reserve Chairman Jerome Powell scheduled to deliver his semi-annual monetary policy update to the Senate Banking Committee on March 7. There is.
Anxiety about the yen
JPY JPY=EBS In early trading, the dollar was down 0.10% to $150.08, trading at around 150 yen, with the market wary of the possibility of Japan’s intervention to devalue its currency and provocations from government officials. .
The yen, which is highly sensitive to U.S. interest rates, is under continued pressure as investors dial back expectations for the scale and pace of the U.S. Federal Reserve’s easing cycle. Asian currencies have fallen 6% this year.
Kieran Williams, head of Asian foreign exchange at InTouch Capital Markets, said: “If US bond yields rise further, the effectiveness of verbal intervention will diminish, and the Japanese authorities will need to take concrete steps to slow the pace of yen depreciation. We may have to take action.”
Japan I slipped unexpectedly The country fell into recession late last year, losing its position as the world’s third-largest economy to Germany, raising questions about when the central bank would begin to withdraw from a decade of ultra-loose policy.
On the other hand, the euro Euro=EBS The pound fell 0.07% to $1.0763. GBP=D3 It last traded at $1.2582, down 0.14% on the day.
australian dollar Australian dollar=D3 The New Zealand dollar fell 0.21% to $0.609, down 0.20% to $0.651.
Bitcoin in cryptocurrency BTC= It last traded up 1.16% at $51,966.22.
World exchange rates https://tmsnrt.rs/2RBWI5E
(Reporter Ankur Banerjee in Singapore; Editing by Himani Sarkar)
((ankur.banerjee@thomsonreuters.com;; Mobile – +65 8121 3925; Follow on X (formerly Twitter): @AnkurBanerjee17;))
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