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
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
