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Dollar Holds Steady as Market Awaits PMI Data Releases

22 Feb 2024 , 09:55 AM

As investors awaited a plethora of business activity surveys to assess the state of the world’s leading economies and the implications for the outlook for interest rates globally, the dollar remained relatively stable on Thursday. 

Later in the day, flash Purchasing Managers’ Index (PMI) data for the US, the UK, and the euro zone are anticipated. These data will shed more light on each country’s manufacturing and service sectors.

The euro increased by 0.11% to $1.0831 in early Asian trading, while sterling remained unchanged at $1.2638.

The dollar recently traded at 150.34 yen, having eked out a gain versus the yen and moving back above the 150 mark.

With persistent inflationary pressures and the risk of reducing rates prematurely, policymakers—especially those from the Federal Reserve and European Central Bank—have been resolutely resisting market expectations for a wave of rate reduction this year on a global scale.

The Fed is committed to starting rate decreases later this year, as evidenced by the minutes of its most recent policy meeting, which were made public on Wednesday.

According to the CME FedWatch Tool, traders are currently pricing in just around a 30% possibility that the Fed could start easing rates in May, which is significantly less than the over 80% chance that was the case a month ago.

Recent statistics showing the country’s consumer and producer prices growing more than anticipated in January and the labour market’s continued resilience have led to an adjustment in rate expectations. 

In other news, the New Zealand dollar reached a one-month high of $0.6198, and the Australian dollar increased by 0.07% to $0.65565.

The Reserve Bank of New Zealand (RBNZ) is expected to retain the cash rate at 5.5% during its meeting next week, although some analysts believe there may be a possibility of a raise. 

For feedback and suggestions, write to us at editorial@iifl.com

The 10 Strongest Currencies In The World – Forbes Advisor

Related Tags

  • Dollar
  • Euro
  • FOREX
  • Yen
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