U.S. Dollar Falls On Fed Rate Cut Hopes
13 May 2019 - 5:28PM
RTTF2
The U.S. dollar depreciated against its major counterparts in
the European session on Monday, as hopes for a Fed rate cut
returned back following the U.S. decision to hike tariffs on
Chinese goods last week.
Market participants renewed bets for a quarter-point rate cut by
December, after U.S. President Donald Trump raised tariffs on US
imports from China.
The Fed's short-term rates are currently in a range of 2.25
percent to 2.5 percent.
Speaking in Mississippi, Atlanta Fed President Raphael Bostic
said Friday that he could not rule out whether the new tariffs
could trigger a rate cut.
"Depending on the severity of the response, it could," Bostic
told.
"It really depends. It depends on what businesses decide to do
and then it depends on how long the tariffs are in place."
Today's economic calendar is quiet, with investors awaiting
speeches from FOMC members Rosengren and Clarida in Boston.
Key economic data for the week include retail sales, import and
export prices, manufacturing production and building permits for
April.
The currency traded mixed against its major counterparts in the
Asian session. While it fell against the franc and the yen, it held
steady against the euro and the pound.
The greenback declined to 1.0079 against the Swiss franc, its
lowest since April 17. If the greenback extends fall, 0.99 is
likely seen as its next support level.
Having climbed to 1.1223 against the euro at 3:45 am ET, the
greenback reversed direction with the pair trading at 1.1242. The
greenback is seen finding support around the 1.14 region.
The greenback edged down to 109.59 against the yen, from a high
of 109.84 hit at 5:30 pm ET. The next possible support for the
greenback is seen around the 107.00 level.
Preliminary data from the Cabinet Office showed that Japan's
leading index reached its lowest level since mid-2016.
The leading index, which measures the future economic activity,
declined to 96.3 in March from 97.1 in February. The score matched
economists' expectations.
The greenback reversed from an early high of 1.2998 against the
pound, falling to 1.3028. The currency is poised to target support
around the 1.32 mark.
The greenback slightly eased to 0.6986 against the aussie and
0.6592 against the kiwi, from its early 4-day highs of 0.6968 and
0.6573,respectively. On the downside, 0.715 and 0.68 are likely
seen as the next support levels for the greenback against the
aussie and the kiwi, respectively.
The greenback pulled back to 1.3421 against the loonie, off its
early high of 1.3445. The greenback is likely to test support
around the 1.32 region.
In today's events, Federal Reserve Governor Richard Clarida will
deliver a speech at an event hosted by the Federal Reserve Bank of
Boston at 9:05 am ET.
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