US dollar strengthens ahead of expected Fed rate cut
Markets brace for likely first rate cut since March 2020
Traders pricing in more than 60% chance of a 50 bps cut
Retail sales and other economic show stronger US economy
Pound Sterling weakens as BOE set to hold rates
Updates prices throughout, adds analyst comment
By Chibuike Oguh
NEW YORK, Sept 17 (Reuters) -The U.S. dollar strengthened against most major currencies on Tuesday following better-than-expected retail sales data that seemed to support a less aggressive stance by the Federal Reserve, which is widely expected to deliver itsfirst interest rate cut in more than four years.
Commerce Department data showed on Tuesday that U.S. retail sales unexpectedly rose 0.1% in August, suggesting that the economy remained on solid footing through much of the third quarter.
The Fed's Federal Open Market Committee will give its interest rate decision at the conclusion of its meeting on Wednesday after which Chair Jerome Powell will hold a press conference. The last Fed rate cut was in March 2020 during the COVID-19 pandemic.
"I think like all the markets at this point are hostage to this FOMC meeting tomorrow," said Marvin Loh, senior global market strategist at State Street in Boston.
"Retail sales were okay. It certainly doesn't show that there should be an imminent rush to have supersized cuts and it would be somewhat unprecedented for the Fed to really panic in rate cuts given where the market is at this point."
Against the yen JPY=EBS, the dollar rose 0.87%to 141.830 after initially weakening following the retail sales data.
The euro EUR=EBS was down 0.10% to$1.112125, not far from the year's high of $1.1201. Against the Swiss franc, the dollar was up 0.15% to 0.8460.
The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, gained 0.199%at 100.90.
Fed funds futures 0#FF: show thechance of a 50 basis point rate cut stood at 63%, against 30% a week ago, while the chances of a 25 basis point cut was at 37%. The odds have narrowed sharply after media reports revived the prospect of a more aggressive easing. FEDWATCH
Other economic data on Wednesday appeared to provide support for the Fed to be less aggressive in cutting rates. U.S. business inventories, a key component of gross domestic product, posted a better-than-expected gain of 0.3% in July while factory output rebounded in August.
"Overall, the market is pricing in numerous rate cuts over the next several months and there are those voices that suggest that maybe the market has gotten ahead of itself," said Axel Merk, president and chief investment officer at Merk Investments in Pal Alto, California.
The Bank of Japan is expected to keep policy steady on Friday but signal that further interest rate hikes are coming, perhaps turning the next meeting in October into a live one.
The Bank of England is also expected to retain interest rates at 5% when it meets on Thursday, although markets have priced in a nearly 36% chance of another cut. 0#BOEWATCH
Sterling GBP=D3 - the best performing G10 currency this year with a 3.41% rise on the dollar - has risen thanksto signs of resilience in Britain's economy and stickiness in inflation. It was last down 0.37%at $1.31665.
Chinese markets are closed for the Mid-Autumn Festival break until Wednesday, though the yuan CNH=D3 was up 0.16% at 7.1090 in offshore trade.
The Canadian dollar CAD=D3 was up 0.04% at $1.35935. The Australian AUD=D3 and New Zealand NZD=D3 dollars bought $0.67595 and $0.61900respectively.
In cryptocurrencies, bitcoin BTC= gained 5.00% to $60,544.00. Ethereum ETH= rose 3.29% to $2,349.00.
Currency bid prices at 17 September 06:54 p.m. GMT | |||||||
Description | RIC | Last | U.S. Close Previous Session | Pct Change | YTD Pct | High Bid | Low Bid |
Dollar index | =USD | 100.91 | 100.7 | 0.21% | -0.45% | 101 | 100.56 |
Euro/Dollar | EUR=EBS | 1.1121 | 1.1133 | -0.11% | 0.75% | $1.1146 | $1.1111 |
Dollar/Yen | JPY=D3 | 141.87 | 140.59 | 0.91% | 0.59% | 141.93 | 140.36 |
Euro/Yen | EURJPY= | 1.1121 | 156.53 | 0.79% | 1.38% | 157.87 | 156.06 |
Dollar/Swiss | CHF=EBS | 0.8461 | 0.8449 | 0.15% | 0.53% | 0.8478 | 0.843 |
Sterling/Dollar | GBP=D3 | 1.3163 | 1.3216 | -0.4% | 3.44% | $1.3229 | $1.3147 |
Dollar/Canadian | CAD=D3 | 1.3593 | 1.3587 | 0.06% | 2.55% | 1.3617 | 1.3581 |
Aussie/Dollar | AUD=D3 | 0.6756 | 0.6752 | 0.07% | -0.9% | $0.6769 | $0.6742 |
Euro/Swiss | EURCHF= | 0.9409 | 0.9403 | 0.06% | 1.32% | 0.9422 | 0.9383 |
Euro/Sterling | EURGBP= | 0.8447 | 0.8423 | 0.28% | -2.55% | 0.8454 | 0.8419 |
NZ Dollar/Dollar | NZD=D3 | 0.6186 | 0.6201 | -0.21% | -2.07% | $0.6211 | 0.6179 |
Dollar/Norway | NOK= | 10.5965 | 10.5865 | 0.09% | 4.55% | 10.623 | 10.5601 |
Euro/Norway | EURNOK= | 11.7859 | 11.786 | 0% | 5.01% | 11.8099 | 11.7553 |
Dollar/Sweden | SEK= | 10.1823 | 10.1687 | 0.13% | 1.15% | 10.2075 | 10.1504 |
Euro/Sweden | EURSEK= | 11.3252 | 11.322 | 0.03% | 1.8% | 11.3465 | 11.306 |
Reporting by Chibuike Oguh in New York; additional reporting by Tom Westbrook and Linda Pasquini in London; Editing by Andrea Ricci, Alexandra Hudson and Nick Zieminski
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
