{"id":12985,"date":"2023-05-24T04:33:17","date_gmt":"2023-05-24T08:33:17","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/forex\/dollar-steady-as-debt-ceiling-worries-weigh-kiwi-slips-1\/"},"modified":"2023-05-24T04:33:17","modified_gmt":"2023-05-24T08:33:17","slug":"dollar-steady-as-debt-ceiling-worries-weigh-kiwi-slips-1","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=12985","title":{"rendered":"Dollar steady as debt ceiling worries weigh; Kiwi slips 1%"},"content":{"rendered":"
\n

By Ankur Banerjee<\/p>\n

SINGAPORE (Reuters) – The U.S. dollar eased on Wednesday but remained close to a two-month high as negotiations over raising the U.S. debt ceiling dragged on, while the dived 1% after New Zealand’s central bank surprised markets by flagging an end to rate hikes. <\/p>\n

The Reserve Bank of New Zealand raised interest rates by 25 basis points, as expected, to the highest in more than 14 years at 5.5% and its policy statement forecast that rate would prevail until June, 2024 – unchanged from the earlier forecast.<\/p>\n

“The RBNZ was surprisingly dovish in its messages and forecasts,” said Carol Kong, currency strategist at Commonwealth Bank of Australia (OTC:) (CBA). “In contrast to market expectations,\u00a0the RBNZ kept its projected cash rate peak at 5.50% and signalled its tightening cycle is over.”<\/p>\n

The New Zealand dollar slipped 1.3% to near three week low of $0.6165 after the decision. The Australian dollar eased 0.24% to $0.659. <\/p>\n

Meanwhile, the impasse in Washington over the debt ceiling negotiation has helped lift the dollar, even though it could lead to a default and push the country into recession, as investors reckoned that could spell worse trouble for the global economy. <\/p>\n

The , which measures the U.S. currency against six key rivals, was at 103.43 in Asian hours, not far from the 103.65 two-month peak it touched overnight. <\/p>\n

Treasury Secretary Janet Yellen has warned that the federal government could no longer have enough money to pay all its bills as soon as June 1, raising the risk of a damaging default. <\/p>\n

Investors largely shunned riskier investments as another round of talks between the White House and the Republicans to raise the borrowing limit ended on Tuesday with no sign of progress. <\/p>\n

“While the probability of a technical default is very low, it appears to be materially higher than in past debt ceiling stand-offs due to the current political landscape,” said Jake Jolly, head of investment analysis at BNY Mellon (NYSE:) Investment Management.<\/p>\n

“Moreover, it’s unclear what shape a debt deal will take and the impact on the fiscal outlook.”<\/p>\n

Elsewhere, the yen strengthened 0.11% to 138.42 per dollar, having touched a six-month low of 138.91 overnight, while euro was up 0.09% to $1.0778.<\/p>\n

Sterling was last trading at $1.2431, up 0.17% on the day, after touching a one month low of $1.2373 on Tuesday. Investors will watch out for inflation data from UK that will showcase whether prices have eased.<\/p>\n

Hawkish rhetoric from Federal Reserve officials has also lifted the dollar, with traders anticipating interest rates to stay elevated for longer. <\/p>\n

Markets are pricing in a 27% chance of a 25 basis point hike in June, CME FedWatch tool showed, after the Fed’s quarter point increase earlier this month. <\/p>\n

Investors will get more clues on policy from the minutes of the Fed\u2019s May meeting, due later in the global day. <\/p>\n

“We suspect the base case among the leadership of the committee is that the tightening cycle is probably over,” said Kevin Cummins (NYSE:), chief economist at NatWest Markets.<\/p>\n

“Recent rhetoric from a few officials seem\u00a0interested in additional hike(s), and this sentiment may well have been reflected in the tone of the minutes.”<\/p>\n

========================================================<\/p>\n

Currency bid prices at 0445 GMT<\/p>\n

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid <\/p>\n

Previous Change <\/p>\n

Session <\/p>\n

Euro\/Dollar $1.0781 $1.0771 +0.09% +0.61% +1.0781 +1.0768 <\/p>\n

Dollar\/Yen 138.3750 138.5900 -0.10% +5.49% +138.6300 +138.3800 <\/p>\n

Euro\/Yen 149.19 149.25 -0.04% +6.34% +149.3100 +149.0900 <\/p>\n

Dollar\/Swiss 0.9009 0.9016 -0.08% -2.57% +0.9015 +0.9009 <\/p>\n

Sterling\/Dollar 1.2434 1.2416 +0.15% +2.82% +1.2435 +1.2416 <\/p>\n

Dollar\/Canadian 1.3500 1.3503 +0.00% -0.34% +1.3510 +1.3497 <\/p>\n

Aussie\/Dollar 0.6599 0.6611 -0.18% -3.19% +0.6615 +0.6586 <\/p>\n

NZ 0.6167 0.6248 -1.30% -2.87% +0.6256 +0.6166 <\/p>\n

Dollar\/Dollar <\/p>\n

All spots<\/p>\n

Tokyo spots<\/p>\n

Europe spots <\/p>\n

Volatilities <\/p>\n

Tokyo Forex market info from BOJ <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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