U.S. dollar gains as market awaits Fed decision

  • World
  • Saturday, 10 Jun 2023

NEW YORK, June 9 (Xinhua) -- The U.S. dollar moved marginally higher on Friday as the market is waiting for the U.S. consumer price index (CPI) and the Federal Reserve's interest rate decision.

The dollar index, which measures the greenback against six major peers, was up 0.20 percent at 103.5549 in late trading.

With no economic data scheduled for Friday, the market generally expects the Fed to maintain a status quo in the upcoming decision meeting next week. Federal Reserve officials have entered the blackout period before the decision, and the market believes that Fed Chairman Powell seems inclined to maintain the status quo next week but will emphasize that the tightening actions are not over yet.

However, Citigroup analyst Veronica Clark, who was the first to predict the interest rate hike by the Bank of Canada this week in the Bloomberg survey, pointed out that the experience of the Bank of Canada is somewhat similar to the cautionary tale of the Fed pausing rate hikes. Citigroup's basic forecast is that the Federal Reserve will raise rates by 25 basis points next week.

The United States is scheduled to release the CPI data for May next Tuesday, one day before the Fed's monetary decision. Economists surveyed by Bloomberg expect that the overall and core CPI for May will decrease but still remain well above the Fed's target of 2 percent.

The U.S. dollar index rebounded after Thursday's pullback as the rise of 2-year Treasury notes provided additional support to the American currency, according to Vladimir Zernov, analyst with market information supplier FX Empire.

Statistics showed that the yield of 2-year Treasury notes added more than 6 basis points to over 4.6 percent on Friday.

In late New York trading, the euro was down to 1.0749 U.S. dollars from 1.0779 dollars in the previous session, and the British pound increased to 1.2575 U.S. dollars from 1.2555 dollars in the previous session.

The U.S. dollar bought 139.4000 Japanese yen, higher than 138.9410 Japanese yen of the previous session. The U.S. dollar was up to 0.9031 Swiss franc from 0.8992 Swiss franc, and it decreased to 1.3351 Canadian dollars from 1.3359 Canadian dollars. The U.S. dollar increased to 10.8235 Swedish Krona from 10.8011 Swedish Krona.

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