SingaPore, May 17 (BNA): The dollar held steady as traders cut bets on imminent US rate cuts after strong consumer spending data, while the greenback also benefited from its safe-haven status as long as there was a risk of a US debt default. . stayed.
The dollar hit a two-week high of 136.69 yen overnight and hovered just below that at 136.54 on the Asian day, according to Reuters.
It also broke out of its 50-day moving average against the euro, to trade at $1.0866 for the common currency.
Rabobank expected the euro to drop to $1.06 in six months.
The yen may have drawn some stability from data showing the Japanese economy grew at an annualized rate of 1.6% in the latest quarter, beating analysts’ expectations.
Expectations of a US rate cut anytime soon were dampened by a strong increase in consumer spending in April, and hawkish comments from Federal Reserve officials.
US 2-year Treasury yields rose 7 basis points overnight to 4.12% and 10-year yields rose 4 basis points to 3.55%, broadly flat in Asia.
The pricing of interest rate futures does not mean there is no chance of a rate cut in June, down from about 17% chance seen a month ago.
The Australian dollar processed the previous day’s losses, and after falling through its 50-day moving average, it sat at $0.6655.
The pound sterling, at $1.2480, also came under some pressure.
The New Zealand dollar was broadly steady at $0.6244, with investors eyeing a 25 basis point rate hike next week and possibly again after that.
Analysts at ANZ Bank said: We see a 20% chance of a 50 basis point increase and a 5% chance of a halt. “Either can backfire by lowering expectations for the future.”
European inflation data is also due, although a slight deviation from the preliminary numbers is expected
US Mortgage and Housing Starts data will be released later today.
The Turkish lira, which has been under pressure since the election results, left open the possibility of President Recep Tayyip Erdogan extending his rule – and his unorthodox economic policies – to a 10-week low of 19.75 per dollar.
The Thai baht, which initially rose on the back of strong election results for progressive parties, fell about 0.4%.
NAA