Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

Dollar little changed as traders await key U.S. data

Published 07/06/2022, 11:03 PM
Updated 07/07/2022, 03:42 PM
© Reuters. FILE PHOTO: A woman holds Euro banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/Illustration
EUR/USD
-
DBKGn
-
DX
-
HG
-
BTC/USD
-

By Herbert Lash

NEW YORK (Reuters) - The dollar was little changed after the euro briefly slid to a new two-decade low on Thursday, and sterling held to gains after Boris Johnson said he was quitting as British prime minister.

Investors await U.S. jobs data on Friday and the consumer price index next week, which should signal the pace of inflation and whether the Federal Reserve continues to aggressively hike interest rates when policymakers next meet on July 26-27.

"What's being priced into the July Fed meeting is predicated on that inflation print coming in reasonably elevated. We suspect that it will," said Bipan Rai, North America head of FX strategy at CIBC Capital Markets in Toronto.

The strength of non-farm payrolls on Friday should also point to how fast wages are rising, while the Fed doesn't appear to be as encumbered as other major central banks, he said.

"To us that suggests the U.S. dollar is still going to be the currency that outperforms," Rai said.

The U.S. central bank should raise rates by 75 basis points later this month and then most likely deliver a 50 basis point hike at its following policy meeting in September, Fed Governor Christopher Waller said on Thursday.

The dollar index, a measure of the dollar's value against six counterparts, rose 0.065% to 107.11 after peaking at 107.27 on Wednesday, a level not seen since late 2002. The euro was down 0.26% to $1.0157 after setting a fresh two-decade low of 1.01445 on Thursday.

Investors are grappling with the risks of a recession and whether rate hikes will be paused as global demand wanes.

The Atlanta Fed's GDPNow model estimates seasonally adjusted GDP growth on an annual basis in the second quarter was -2.1%.

Implied volatility remains near its highest levels since late March 2020 at 11.2%, reflecting a nervous market as investors contemplate parity between the euro and dollar.

"Parity is within reach, and one can expect the market to want to see it now," said Moritz Paysen, currency and rates advisor at Berenberg.

According to George Saravelos, global head of forex research at Deutsche Bank (ETR:DBKGn), "if Europe and the U.S. slip-slide into a recession in Q3 while the Fed is still hiking rates, these levels (0.95-0.97 in EUR/USD) could well be reached."

Commodity-linked currencies strengthened as copper prices climbed. Some investors returned to the market on Thursday after heightened recession fears sent the red metal to its lowest level in nearly 20 months.

The Australian dollar rose 0.86% to 0.6839 against the greenback after recently slipping to its lowest level since June 2020 at 0.6762.

The dollar fell 0.43% to 1.2980 versus the Canadian dollar.

GRAPHIC: AUD (https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnxqlzpq/Pasted%20image%201657190411529.png)

The Swiss Franc eased from a seven-year high, with the dollar up 0.38% at 0.9743.

Sterling rose after Johnson said he would resign. It was last at $1.2012, up 0.69% on the day.

Analysts said the pound was mostly moving on broader economic concerns about a global recession, rather than Britain's political turmoil.

Bitcoin rose 3.99% to $21,367.93.

Currency bid prices at 2:59PM (1859 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 107.1200 107.0600 +0.07% 11.976% +107.2400 +106.7000

Euro/Dollar $1.0156 $1.0183 -0.26% -10.66% +$1.0221 +$1.0145

Dollar/Yen 136.0900 135.9000 +0.15% +18.22% +136.2200 +135.5500

Euro/Yen 138.23 138.39 -0.12% +6.07% +139.0700 +137.9900

Dollar/Swiss 0.9745 0.9710 +0.36% +6.82% +0.9745 +0.9685

Sterling/Dollar $1.2012 $1.1922 +0.76% -11.18% +$1.2023 +$1.1912

Dollar/Canadian 1.2979 1.3036 -0.43% +2.66% +1.3055 +1.2963

Aussie/Dollar $0.6839 $0.6783 +0.84% -5.90% +$0.6848 +$0.6765

Euro/Swiss 0.9896 0.9883 +0.13% -4.56% +0.9931 +0.9875

Euro/Sterling 0.8453 0.8536 -0.97% +0.65% +0.8554 +0.8455

NZ $0.6176 $0.6147 +0.59% -9.66% +$0.6195 +$0.6144

Dollar/Dollar

Dollar/Norway 10.0840 10.1300 -0.46% +14.46% +10.1505 +10.0745

Euro/Norway 10.2464 10.3224 -0.74% +2.33% +10.3434 +10.2430

© Reuters. FILE PHOTO: U.S. dollar banknotes are displayed in this illustration taken, February 14, 2022. REUTERS/Dado Ruvic/Illustration

Dollar/Sweden 10.5498 10.5327 -0.08% +16.99% +10.5684 +10.4938

Euro/Sweden 10.7149 10.7230 -0.08% +4.68% +10.7483 +10.7097

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.