{"id":9759,"date":"2023-05-17T03:14:55","date_gmt":"2023-05-17T07:14:55","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/forex\/u-s-debt-drama-and-data-hoist-dollar\/"},"modified":"2023-05-17T03:14:55","modified_gmt":"2023-05-17T07:14:55","slug":"u-s-debt-drama-and-data-hoist-dollar","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=9759","title":{"rendered":"U.S. debt drama and data hoist dollar"},"content":{"rendered":"
\n

By Tom Westbrook<\/p>\n

SINGAPORE (Reuters) – The dollar held firm on Wednesday, as traders trimmed bets on imminent U.S. rate cuts following solid consumer spending data, while the greenback also benefitted from its status as a safe-haven so long as risk of a U.S. debt default remained.<\/p>\n

President Joe Biden and top congressional Republican Kevin McCarthy have edged closer to a deal to raise the U.S. debt ceiling – but nothing is clinched yet.<\/p>\n

While Biden warned that any default would land the economy in recession, investors fear the impact globally would be negative, and consequently see the greenback as a safe haven. <\/p>\n

The dollar hit a two-week peak of 136.69 yen overnight and hovered just below that at 136.54 in the Asia day. It has also broken above its 50-day moving average against the euro to trade at $1.0866 to the common currency.<\/p>\n

“A crushing blow to the world’s number one economy can only have negative shockwaves to the global economy, and reduce risk appetite, which would thus become a safe-haven event,” Rabobank strategist Jane Foley said.<\/p>\n

Rabobank forecast the euro falling to $1.06 in six months.<\/p>\n

The yen may have drawn some stability from data showing Japan’s economy grew at an annualised rate of 1.6% in the last quarter, beating analysts expectations.<\/p>\n

Expectations for U.S. interest rate cuts any time soon were dampened by the solid increase in April consumer spending, and by hawkish comments from Federal Reserve officials.<\/p>\n

Chicago Fed President Austan Goolsbee said it was “far too premature to be talking about rate cuts”, and Cleveland Fed President Loretta Mester said rates were not yet at a point where the central bank could hold steady, given stubborn inflation.<\/p>\n

Two-year U.S. Treasury yields rose seven basis points overnight to 4.12% and benchmark 10-year yields rose 4 bps to 3.55%, and held broadly steady in Asia.<\/p>\n

Interest rate futures pricing implies no chance of a rate cut in June, down from about a 17% chance seen a month ago.<\/p>\n

“We expect some modest further increases in the dollar as markets continue to take out pricing for rate cuts,” said Commonwealth Bank of Australia (OTC:) strategist Joe Capurso. “A rate hike is possible this year, though the hurdle is high.”<\/p>\n

The Australian dollar nursed the previous day’s losses and, having fallen through its 50-day moving average, sat at $0.6655. <\/p>\n

Sterling, at $1.2480, was also under some pressure.<\/p>\n

The New Zealand dollar was broadly steady at $0.6244, with investors looking ahead to a 25 bp interest rate hike next week and perhaps one more after that.<\/p>\n

“We see a 20% chance of a 50 bp hike and a 5% chance of a pause,” analysts at ANZ Bank said. “Either could backfire by driving down future … expectations.”<\/p>\n

European inflation data is also due, though little deviation from preliminary figures is expected. U.S. mortgage and housing starts data is published later in the day.<\/p>\n

, which has been under pressure since election results leave open the possibility of President Tayyip Erdogan extending his rule – and his unorthodox economic policies – hit a fresh 10-week low of 19.75 per dollar.<\/p>\n

Thailand’s baht, which had initially climbed on strong election results from progressive parties, slipped about 0.4% as politicians enter what could be a protracted period of dealmaking until a government is formed. [EMRG\/FRX]\n

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

Currency bid prices at 0530 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 <\/p>\n

$1.0860 $1.0862 -0.01% +0.00% +1.0873 +1.0860 <\/p>\n

Dollar\/Yen <\/p>\n

136.7450 136.3500 +0.29% +0.00% +136.7700 +136.3900 <\/p>\n

Euro\/Yen <\/p>\n

148.50 148.15 +0.24% +0.00% +148.5500 +148.0800 <\/p>\n

Dollar\/Swiss <\/p>\n

0.8964 0.8966 -0.02% +0.00% +0.8965 +0.8950 <\/p>\n

Sterling\/Dollar <\/p>\n

1.2471 1.2487 -0.12% +0.00% +1.2493 +1.2472 <\/p>\n

Dollar\/Canadian <\/p>\n

1.3484 1.3479 +0.00% +0.00% +1.3485 +1.3468 <\/p>\n

Aussie\/Dollar <\/p>\n

0.6643 0.6654 -0.17% +0.00% +0.6671 +0.6643 <\/p>\n

NZ <\/p>\n

Dollar\/Dollar 0.6235 0.6231 +0.05% +0.00% +0.6252 +0.6228 <\/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":"

By Tom Westbrook SINGAPORE (Reuters) – The dollar held firm on Wednesday, as traders trimmed bets on imminent U.S. rate cuts following solid consumer spending data, while the greenback also benefitted from its status as a safe-haven so long as risk of a U.S. debt default remained. President Joe Biden and top congressional Republican Kevin […]<\/p>\n","protected":false},"author":1,"featured_media":2090,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[244],"tags":[83],"class_list":["post-9759","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-forex","tag-featured"],"yoast_head":"\nU.S. debt drama and data hoist dollar | iFintechWorld<\/title>\n<meta name=\"description\" content=\"By Tom Westbrook SINGAPORE (Reuters) - The dollar held firm on Wednesday, as traders trimmed bets on imminent U.S. rate cuts following solid consumer\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=9759\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"U.S. debt drama and data hoist dollar | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"By Tom Westbrook SINGAPORE (Reuters) - 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