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Dollar fights for direction

FOREX_Dollar-fights-for-direction_FXPIG

The dollar struggled for direction on Thursday, failing to build on the prior session’s rally that came after Federal Reserve minutes hinted interest rates could rise faster than previously expected.

What are currencies doing?

The ICE U.S. Dollar Index DXY, -0.02%  was marginally higher at 90.016, after having traded as high as 90.235 earlier in the session. The index on Wednesday rose 0.3%for a third straight session of gains.

The euro EURUSD, -0.0081%  rose to $1.2295 from $1.2286 late Wednesday in New York.

The pound GBPUSD, -0.3736%  fell to $1.3898 from $1.3919 on Wednesday, staying lower after data showed U.K. economic growth in the fourth quarter was weaker than initially expected. Gross domestic product growth was revised down to 1.4% from 1.5%.

The yen rallied against the greenback, with the dollar USDJPY, -0.42%  buying ¥107.32 compared with ¥107.78 on Wednesday.

What is driving the market?

The mixed dollar trade came as investors followed moves in U.S. Treasury yields, which jumped on Wednesday after hawkish minutes from the Fed sparked speculation interest rates could go up four instead of three times this year.

The yield on 10-year U.S. notes TMUBMUSD10Y, -0.53% rose to a four-year high on Wednesday, inching nearer the closely-watched 3% handle. On Thursday, however, the yield moved back slightly to 2.919%, keeping the dollar gains in check.

Higher U.S. interest rates tend to boost the dollar because they can attract foreign investments, which spark demand for the greenback, increasing the currency’s value.

What is on the economic calendar?

Weekly jobless claims are due at 8:30 a.m. Eastern Time, followed by leading economic indicators at 10 a.m.

Investors may pay close attention to Fed officials scheduled to speak Thursday, including New York Fed President William Dudley, due to make remarks at 10 a.m. Eastern Time, and Atlanta Fed President Raphael Bostic, on deck at 12:10 p.m. Eastern.

Earlier on Thursday, the Fed’s vice chairman for supervision, Randall Quarles, said in Tokyo that recent low inflation readings are not “a great concern,” and the economy is “performing very well.”

Source: www.marketwatch.com

The dollar struggled for direction on Thursday, failing to build on the prior session’s rally that came after Federal Reserve minutes hinted interest rates could rise faster than previously expected.

What are currencies doing?

The ICE U.S. Dollar Index DXY, -0.02%  was marginally higher at 90.016, after having traded as high as 90.235 earlier in the session. The index on Wednesday rose 0.3%for a third straight session of gains.

The euro EURUSD, -0.0081%  rose to $1.2295 from $1.2286 late Wednesday in New York.

The pound GBPUSD, -0.3736%  fell to $1.3898 from $1.3919 on Wednesday, staying lower after data showed U.K. economic growth in the fourth quarter was weaker than initially expected. Gross domestic product growth was revised down to 1.4% from 1.5%.

The yen rallied against the greenback, with the dollar USDJPY, -0.42%  buying ¥107.32 compared with ¥107.78 on Wednesday.

What is driving the market?

The mixed dollar trade came as investors followed moves in U.S. Treasury yields, which jumped on Wednesday after hawkish minutes from the Fed sparked speculation interest rates could go up four instead of three times this year.

The yield on 10-year U.S. notes TMUBMUSD10Y, -0.53% rose to a four-year high on Wednesday, inching nearer the closely-watched 3% handle. On Thursday, however, the yield moved back slightly to 2.919%, keeping the dollar gains in check.

Higher U.S. interest rates tend to boost the dollar because they can attract foreign investments, which spark demand for the greenback, increasing the currency’s value.

What is on the economic calendar?

Weekly jobless claims are due at 8:30 a.m. Eastern Time, followed by leading economic indicators at 10 a.m.

Investors may pay close attention to Fed officials scheduled to speak Thursday, including New York Fed President William Dudley, due to make remarks at 10 a.m. Eastern Time, and Atlanta Fed President Raphael Bostic, on deck at 12:10 p.m. Eastern.

Earlier on Thursday, the Fed’s vice chairman for supervision, Randall Quarles, said in Tokyo that recent low inflation readings are not “a great concern,” and the economy is “performing very well.”

Source: www.marketwatch.com

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