SINGAPORE (Reuters) – The dollar was firm on Wednesday as stronger-than-expected US economic data and hawkish Federal Reserve comments signaled higher interest rates. Meanwhile, bets on European rate hikes also have a common currency that sticks above par.
With German inflation at its highest in nearly 50 years and European Central Bank officials calling for a more significant rate hike, markets are betting even higher on the likelihood of a 75 basis point rate hike next week. .
The euro rose 0.16% to $1.0003 in early Asian trading. If this holds up, it will be three consecutive increases. Eurozone inflation data is due at 0900 GMT.
The US Dollar Index, which measures the US dollar against a basket of currencies, hovers at 108.71, just below its 20-year peak of 109.48 made on Monday, with the dollar rising overnight against Sterling, Australia and the kiwi. Did.
The sliding yen stabilized at 138.56 yen to the dollar.
China’s activity survey, scheduled for 1:30 am GMT, will be the focus of the Asia session and could weigh on regional commodity currencies such as the yuan and the Australian dollar if the data disappoints.
Another month of manufacturing contraction is expected in August with the forecast reading of 49.2 slightly higher than July’s reading of 49.0.
“Recent data, particularly the industrial gains released over the weekend, actually point to the risk of a more severe downside surprise,” said Rodrigo Catril, currency strategist at National Australia Bank in Sydney. I think,” he said. .
The Australian and New Zealand dollars fell, but both stabilized in early trading, with the Australian dollar at $0.6861 and the Kiwi dollar at $0.6139. [AUD/]
The yuan was under pressure at $6.9211 in offshore trading.
U.S. job openings rose by 199,000 to 11.239 million in July, data released overnight show labor demand remains strong, with broader labor data due Friday showing strong Indicates that there is a possibility that
New York Fed President John Williams told The Wall Street Journal that a rate cut “will take some time,” while Atlanta Fed President Rafael Bostic said he “doesn’t think tightening is over.”
Traders have about a 69% chance of a 75 bp rate hike by the Federal Reserve (Fed) next month.
Sterling rose 0.1% to $1.1666 in early trading after hitting a two-and-a-half-year low overnight at $1.1622.
(Reporting by Rae Wee, Editing by Sam Holmes)
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