U.S. Dollar Higher On Hopes Of Aggressive Fed Tightening
04 Abril 2022 - 04:37AM
RTTF2
The U.S. dollar firmed against its major counterparts in the
European session on Monday, as U.S. treasury yields spiked up amid
growing expectations that the Federal Reserve will tighten monetary
policy aggressively in the near future.
The treasury yield curve extended its inversion, with short-term
rates rising above long-term rates, as investors are pricing in a
tighter monetary policy in the months ahead.
The CME Group's FedWatch is now penciling in 50 basis point rate
hikes at the Fed's next three meetings in May, June and July.
The U.S. jobs report released on Friday showed a solid job
growth in March, with the unemployment rate falling to a new
pandemic-era low.
The Fed's minutes, due to be released on Wednesday, could offer
more clues about the future path of rate hikes.
The likelihood of more sanctions against Russia for committing
"war crimes" in Ukraine deteriorated risk sentiment and further
underpinned the safe-haven currency.
The greenback appreciated to a 6-day high of 1.0996 against the
euro and a 5-day high of 0.9281 against the franc, after falling to
1.1054 and 0.9242, respectively in early deals. The greenback may
possibly challenge resistance around 1.08 against the euro and 0.94
against the franc.
The greenback edged up to 122.83 against the yen, from a low of
122.26 hit at 8:15 pm ET. On the upside, 124.00 is possibly seen as
the next resistance level for the greenback.
The greenback rebounded to 1.3093 against the pound, following a
decline to 1.3136 at 3 am ET. If the greenback rises further, it
may likely seek resistance around the 1.28 level.
In contrast, the greenback weakened against the kiwi and was
trading at a 4-day low of 0.6949. The greenback may test support
around the 0.72 region, if it falls again.
The greenback slipped to 0.7523 against the aussie and 1.2485
against the loonie, off its previous highs of 0.7483 and 1.2529,
respectively. The currency is poised to find support around 0.78
against the aussie and 1.21 against the loonie.
U.S. factory orders for February will be released in the New
York session.
US Dollar vs CHF (FX:USDCHF)
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US Dollar vs CHF (FX:USDCHF)
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