Dollar gains as Fed's Powell adopts hawkish tone on economy
Updated at 1520 EDT
By Karen Brettell
NEW YORK, Sept 30 (Reuters) - Thedollar rose on Monday after Federal Reserve Chair Jerome Powell adopted a more hawkish tone on the economy, leading traders to pare bets that the U.S. central bank will cut rates by 50 basis points again at its next meeting.
Powell said recent revisions to data on economic growth, savings rates and personal income had removed some "downside risks" the Fed has been focused on.
He also said that he sees two more interest rate cuts, totaling 50 basis points, this year as abaseline "if the economy performs as expected," and warned that it will likely take several years beforehousing services inflation cools to desirable levels.
"He took his hawkish pills,” said Steve Englander, head, global G10 FX Research and North America macro strategy at Standard Chartered Bank's NY Branch.
“Maybe the market is beginning to worry that they're serious about doing 25 (basis point cuts), because there was a sense that that was just for show that they were going to front load, and here he's talking about upside risks certainly in a way he didn't talk at the FOMC.”
The U.S. central bank on Sept. 18 cut rates by 50 basis points, which Powell called a "recalibration" to account for the sharp decline in inflation since last year.
Powell noted that the economy remained strong but the central bank wanted to stay ahead of and stave off any weakening in the job market.
Traders are currently pricing in a 35% chance of a 50 basis point reduction in November, down from around 37% before Powell's speech and from 53% on Friday, according to the CME Group's FedWatch Tool.
The dollar index =USD was last up 0.42% at 100.86. The euro EUR=EBS fell 0.34% to $1.1125. The greenback gained 1.17%to 143.85 Japanese yen JPY=EBS.
Powell's speech comes before a heavy week of U.S. data including the Institute for Supply Management’s manufacturing index on Tuesday and non-manufacturing report on Thursday, as well as job openings data on Tuesday and Friday’s closely watched employment report for September.
“This week is really about the jobs data,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
Chandler said that another 50 basis points in cuts this year is most likely, adding that he only expects deeper cuts in the event of a “shockingly poor” employment report, which would be fewer than 100,000 jobs gains and/or a rise in the unemployment rate.
Economists polled by Reuters expect employers to have added 140,000 jobs in September and the unemployment rate is expected to stay steady at 4.2%. USNFAR=ECI, USUNR=ECI
Data earlier onMonday showed that German inflation fell to its lowest level since February 2021 this month.
Major brokerages, including Goldman Sachs and JPMorgan, now expect the European Central Bank to deliver a quarter-point cut at its Oct. 17 meeting, revising their forecasts on Friday on recent data showing economic weakness and slowing inflation.
The Australian and New Zealand dollars gained after China's central bank on Friday lowered interest rates and injected liquidity into the banking system.
The Aussie AUD=D3, which is seen as a more liquid proxy for the Chinese yuan, was last up 0.09% at $0.6908. It earlier reached$0.69435, the highest since Feb. 2023.
The kiwi NZD=D3 was up 0.03% at $0.6342and earlier reached $0.63790, the highest since July 2023.
The yuan weakened 0.37% to 7.008 per dollar in offshore trading CNH=D3. It hit 6.9717 on Thursday, the strongest since May 2023.
In cryptocurrencies, bitcoin BTC= fell 3.73% to $63,355.
Annual change in Germany’s consumer prices https://reut.rs/3XEbdJu
The Fed’s dot plot https://reut.rs/3XO1Hoo
Reporting by Karen Brettell; Additional reporting by Tom Westbrook and Alun John; Editing by Andrea Ricci
Asset collegati
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.
