By Gertrude Chavez-Dreyfuss and Amanda Cooper
NEW YORK/LONDON (Reuters) – The U.S. dollar rose against most major currencies on Tuesday, buoyed by hawkish comments from a Federal Reserve official and by better-than-expected economic data from the world’s largest economy that suggested the central bank will not do that. rush to kick off the rate cut cycle.
The dollar strengthened against the euro, yen, Swiss franc, pound sterling and commodity currencies such as the Australian and New Zealand dollars.
Fed Governor Michelle Bowman got the ball rolling for the dollar, reiterating her position on Tuesday that keeping key rates stable “for some time” will likely be enough to get inflation under control. She also reiterated her willingness to increase financing costs if necessary.
The dollar was further boosted by a report showing that US single-family home prices rose steadily in April, rising 0.2% month-on-month after remaining unchanged in March. In the 12 months to April, house prices rose by 6.3%, following a 6.7% increase in March.
According to the Conference Board, US consumer confidence fell slightly in June, with the index reaching 100.4, compared to a downwardly revised 101.3 in May. However, the June figure was marginally higher than the market forecast of 100.
The dollar actually extended its gains following the consumer sentiment data.
“The weakness in some of the earlier data, like retail sales and unemployment claims, isn’t really enough to trigger a currency rally or dollar weakness,” said Thierry Wizman, global currency and interest rate strategist at Macquarie in New York.
“For dollar weakness to occur, we will not only need to see soft data in the US, but we will also need to see the Fed accelerate its rate cuts. We will need to see a divergence in the numbers that is beneficial for the rest of the world.”
Investors are now looking forward to Friday’s release of the US personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure.
In late morning trading, the dollar rose 0.1% against the yen to 159.655 yen, staying within a tight range. Fears of intervention from Japanese officials kept traders from selling the yen sharply against the dollar and other currencies.
Traders remained wary as they tested the 160 level that prompted a 9.79 trillion yen ($61.33 billion) currency intervention from Tokyo in late April and early May.
“The market is showing that they are nervous, and they are very tense about this situation,” said Chris Weston, head of research at Pepperstone.
The yen’s latest decline came after the Bank of Japan’s (BOJ) policy meeting in June, where policymakers disappointed investors who were betting on an immediate reduction in the BOJ’s massive bond purchases.
In the broader market, the euro fell 0.3% against the dollar to $1.0698. It has come under pressure from political unrest in France in the wake of President Emmanuel Macron’s shock election call earlier this month.
Against a basket of currencies, the index rose 0.2% to 105.72.
Sterling was flat to slightly lower against the dollar at $1.2681, while the Australian dollar fell 0.3% to A$0.6638.
was little changed against the U.S. currency, which earlier weakened to 7.2631 per dollar and was within sight of the bottom of the central bank’s daily trading limit of 7.265 on Tuesday.
The yuan has never crossed this threshold.
Politics was also at the forefront of investors’ minds, with the first US presidential debate between President Joe Biden and his predecessor Donald Trump on Thursday and the French elections set to begin this weekend.
In cryptocurrencies, bitcoin gained ground after its worst day in more than two months at the start of the week, partly due to flows out of bitcoin exchange-traded funds (ETFs), analysts said. was last up 4% at $61,809.
Currency
bid
prices at
June 25
02:54
pm GMT
Description RIC Last US Pct YTD Pct High Low
at Close Change bid
Last
Session
Dollar 105.72 105.51 0.22% 4.29% 105.78 105.
index 36
Euro/pop 1.0698 1.0735 -0.34% -3.08% $1.0744 $1.0
ar 691
Dollar/Year 159.69 159.695 0% 13.22% 159.705 159.
n 18
Euro/yen 1.0698 171.34 -0.29% 9.77% 171.39 170.
71
Dollar/SW 0.8943 0.8931 0.14% 6.26% 0.8948 0.89
iss 14
Sterling/ 1.2671 1.2685 -0.09% -0.42% $1.2702 $1.0
Dollars 691
Dollar/Approx 1.3666 1.3658 0.07% 3.1% 1.3681 1.36
nadian 15
Australia/Thurs 0.6638 0.6657 -0.26% -2.63% $0.6673 $0.6
lar 636
Euro/Swiss 0.9565 0.9585 -0.21% 3% 0.9595 0.95
s 65
Euro/Star 0.8439 0.846 -0.25% -2.64% 0.8465 0.84
ling 31
New Zealand 0.6109 0.6124 -0.22% -3.3% $0.613 0.61
Dollar/Do 11
llar
Dollar/no 10.6013 10.5354 0.63% 4.59% 10.6174 10.5
road 209
Euro/Norwegian 11.341 11.304 0.33% 1.04% 11.3626 11.2
yes 84
Dollar/SW 10.512 10.47 0.4% 4.42% 10.5207 10.4
Eden 557
Euro/Sweden 11.2482 11.2403 0.07% 1.1% 11.259 11.2
en 174
