Sunday, June 23, 2024

Dollar Steadies as Fed Advocates Patience; Markets Anticipate Meeting Minutes.

The market assessed the appeals for patience made by Federal Reserve officials and awaited the release of Fed minutes in order to gain further insight into the central bank’s approach, but on Wednesday, the dollar held steady compared to a few peers.
The kiwi kept rising as traders awaited the Reserve Bank of New Zealand’s announcement on monetary policy.

Due to the lack of significant market-moving economic data this week, the major currencies continued to trade in a limited range.

Investors have been putting more money into rate cuts after more muted inflation data last week increased expectations for US rate cuts this year.

The markets priced in about 43 basis points (bps) of easing, down from the 52 bps top last week, following multiple Federal Reserve officials’ cautionary remarks.

Governor Christopher Waller of the Federal Reserve said overnight that he would need to see good inflation data for several more months before he would feel comfortable supporting an easing of monetary policy.

President of the Cleveland Fed, Loretta Mester, reiterated that schedule.

Nevertheless, Waller’s remarks offered little fresh information to the market, according to senior financial market analyst Kyle Rodda.

He essentially said that the Fed will reduce its holdings if inflation declines. One makes no mention of whether rates and inflation will decrease, but it does imply the other.

The PCE report, which is scheduled for release on May 31, will be a critical test for validating market views that US inflation will continue to decline, he continued.

The dollar index increased to 104.76 overnight, although it remained stable at 104.61 against a basket of currencies.

The market will receive the minutes of the Fed’s monetary policy meeting on April 30-May 1 ahead of next week’s data, which investors will closely examine to gain additional insight into the central bank’s outlook.

Following the Fed’s decision to maintain rates steady at that meeting, Fed Chair Jerome Powell ruled out rate increases in his news conference.

With attention on Thursday’s data from the euro zone Purchasing Managers’ Index and the European Central Bank’s agreed wage tracker, the euro was up 0.04% at $1.0858.

With the value of sterling up 0.05% on the day and not far off a two-month high achieved on Tuesday, the currency was last trading at $1.2713 ahead of a critical UK inflation report that was due out later in the day.

Although the Bank of England (BOE) believes headline inflation will go back up to about 2.6% later this year, economists surveyed by Reuters predict the data will likely show headline inflation dropped dramatically to 2.1% in April.

This year, the markets are pricing in 53 basis points of cuts from the BOE.

Trader speculation on the currency pair was suspended, and the dollar held constant at 156.20 against the yen.

The traders’ apprehensions about additional currency intervention by Tokyo persisted even after multiple rounds of intervention earlier this month.

At $0.610, the New Zealand dollar NZD=D3 increased 0.12% against the US dollar.

At $0.6670, the Australian dollar was up 0.05%.

Bitcoin recently increased in value by 0.71% to $70,207.54. At $3,795.00, ether just had a 1.32% increase, not far from its peak since mid-March.

Early this week, speculation around the results of applications for US spot exchange-traded funds that would follow the second-largest cryptocurrency in the world sent cryptocurrency prices surging.

Cryptured Team
Cryptured Team
The writers team at is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.

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