The dollar rose to a seven-week high on Wednesday, boosted by safe-haven bets amid the risk of a US debt default, as traders held back bets the Federal Reserve would cut interest rates soon after solid US consumer spending and housing data. Got it. ,
The US dollar index, a measure of the greenback’s value against six major currencies, climbed to a high of 103.12, its strongest level since late March. It was last up 0.3% at 102.91.
Meanwhile, the euro fell to a six-week low of $1.0811 against the dollar. It last changed down 0.3% at $1.0830.
“Recent data are painting a more resilient picture of US growth than Europe,” said Joe Manimbo, senior market analyst at Convera in Washington.
“Moreover, elevated inflation and low unemployment on this side of the pond suggest that any US rate cut is likely sooner rather than later.”
Data on Wednesday showed US single-family homebuilding increased in April, but were down sharply from the previous month’s figures.
Single-family housing starts, which account for the bulk of homebuilding, rose 1.6% last month to a seasonally-adjusted annual rate of 846,000 units. Data for March was revised to show single-family homebuilding falling at a rate of 833,000 units instead of increasing at a pace of 861,000 units as previously reported.
That followed reports on Tuesday that US retail sales rose in April, although less than expected. But the underlying trend remained strong.
US industrial production also rose 1% last month, easily topping expectations for a flat reading and up slightly from a revised 0.8% increase in March.
In late morning trading, the dollar rose 0.7% against the yen to 137.37 yen, after earlier climbing to a two-week peak of 137.445.
The dollar also traded higher against sterling, which fell 0.2% to $1.2465. The pound fell to a low of $1.2422, its weakest level since late April.
US debt ceiling talks remained in focus.
President Joe Biden will continue talks with congressional leaders on the United States’ debt ceiling later this week, the White House said on Wednesday, as US House of Representatives Speaker Kevin McCarthy vowed to avoid default.
“I think at the end of the day, we don’t have a debt default,” McCarthy said in an interview with CNBC.
Interest rate futures pricing means there is little chance of a Fed rate cut in June, down from the roughly 17% chance seen a month ago.
“We expect the dollar to see some more modest upside as markets continue to price in for a rate cut,” said Joe Capurso, strategist at Commonwealth Bank of Australia. “A rate hike is possible this year, although the hurdle is high.”
The Chinese yuan weakened 7 per dollar on Wednesday for the first time in five months amid geopolitical tensions and more signs of China’s post-COVID-19 recovery losing steam.
In the offshore market, the dollar rose 0.2% to 7.00911.
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Currency Quote Price at 11:07 AM (1507 GMT)
Details RIC Last US Close PCT Change YTD PCT High Bid Low Bid
last change
Session
Dollar Index 102.9900 102.6000 +0.40% -0.483% +103.1200 +102.5300
EUR/USD $1.0820 $1.0862 -0.38% +0.98% +$1.0873 +$1.0811
USD/JPY 137.4450 136.3900 +0.78% +4.84% +137.4550 +136.3100
EUR/JPY 148.71 148.15 +0.38% +5.99% +148.7200 +148.0800
USD/Swiss 0.8992 0.8966 +0.29% -2.75% +0.9026 +0.8950
Sterling/Dollar $1.2465 $1.2487 -0.17% +3.07% +$1.2493 +$1.2422
Dollar/Canadian 1.3485 1.3479 +0.05% -0.47% +1.3535 +1.3442
Aus/Dollar $0.6642 $0.6654 -0.17% -2.55% +$0.6671 +$0.6629
Euro/Swiss 0.9729 0.9737 -0.08% -1.68% +0.9762 +0.9729
Euro/Sterling 0.8680 0.8698 -0.21% -1.85% +0.8720 +0.8678
NZ $0.6237 $0.6231 +0.10% -1.77% +$0.6273 +$0.6228
dollar/dollar
Dollar/Norway 10.8200 10.7170 +1.04% +10.33% +10.8410 +10.7150
Euro/Norway 11.7090 11.6240 +0.73% +11.53% +11.7310 +11.6349
Dollar/Sweden 10.4671 10.3698 +0.18% +0.57% +10.4899 +10.3837
Euro/Sweden 11.3229 11.3029 +0.18% +1.55% +11.3436 +11.2995
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,