U.S. Dollar Rises As Fed Considers March Rate Cut Unlikely
01 February 2024 - 3:27PM
RTTF2
The U.S. dollar strengthened against other major currencies in
the European session on Thursday, after the U.S. Federal Reserve
signaled openness to future rate cuts, adding a March rate cut is
unlikely.
The U.S. Federal Reserve kept key rates unchanged but indicated
that cuts to interest rates are not imminent in view of elevated
inflation.
Trading later in the day may also be impacted by reaction to the
release of reports on weekly jobless claims, manufacturing activity
and construction spending ahead of the all-important January jobs
report, due Friday.
In the Asian trading now, the U.S. dollar rose to nearly a
2-month high of 1.0781 against the euro and nearly a 2-1/2-month
high of 0.6521 against the Australian dollar, from yesterday's
closing quotes of 1.0822 and 0.6579, respectively. If the greenback
extends its uptrend, it is likely to find resistance around 1.06
against the euro and 0.64 against the aussie.
Against the pound and the Swiss franc, the greenback advanced to
a 2-day high of 1.2643 and a 3-day high of 0.8651 from Wednesday's
closing quotes of 1.2698 and 0.8619, respectively. The greenback
may test resistance around 1.25 against the pound and 0.88 against
the franc.
The greenback edged up to 147.09 against the yen, from
yesterday's closing value of 146.47. On the upside, 150.00 is seen
as the next support level for the greenback.
Against the New Zealand and the Canadian dollars, the greenback
to 3-day highs of 0.6096 and 1.3464 from Wednesday's closing quotes
of 0.6141 and 1.3420, respectively. The next support levels for the
greenback is seen around 0.59 against the kiwi and 1.36 against the
loonie.
Looking ahead, PMI reports from various European economies and
U.K. for January, Eurozone flash inflation data for January and
unemployment data for December.
At 7:00 am ET, the Bank of England's monetary policy
announcement is due. The central bank is widely expected to leave
its benchmark rate unchanged at 5.25 percent. The current rate is
the highest since early 2008.
In the New York session, U.S. weekly jobless claims, U.S. and
Canada PMI reports for January and U.S. construction spending for
December are slated for release.
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