The U.S. dollar held at a one-month high on Tuesday as traders weighed a slim but lingering chance of a rate hike at the Federal Reserve’s upcoming meeting, even as falling oil prices eased some concerns over inflation.
Market Analysis
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, edged up 0.03% to 101.55, with the euro down 0.01% at $1.1366. Against the Japanese yen, the dollar gained 0.05% to 163.82, while sterling eased 0.02% to $1.3284.
Although a pause in U.S. attacks on Iran pushed oil prices lower and somewhat eased inflation worries, U.S. Treasury yields retreated only modestly compared with moves in other markets overnight.
Expectations for a rate hike of at least 25 basis points from the Fed at its policy announcement are pegged at 36.3%, according to CME FedWatch, up from 16% a week ago. Markets are pricing in an 81% chance for a hike at the central bank’s September meeting.
Global Economic Impact
The Bank of England and Bank of Japan are widely expected to keep interest rates unchanged at their meetings on Thursday and Friday, respectively, while maintaining a cautious stance on inflation.
In other major currencies, the Australian dollar weakened 0.11% versus the greenback to $0.6981, while New Zealand’s kiwi lost 0.12% to $0.5766.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
