The U.S. dollar index was nearly flat on Wednesday, staying near 20-year highs as investors awaited a speech by Federal Reserve Chairman Jerome Powell at the annual meeting of central banks on Friday. , to find the latest clues on the path of the Fed’s rate hike. The more risk-sensitive Australian and New Zealand dollars were lower.
The ICE U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, was up 0.02% at 108.65 in late New York trade.
Investors have lowered expectations for the central bank to slow rate hikes, considering that annual inflation remained at 8.5% in July, well above the Fed’s 2% target.
Fed funds futures traders are pricing in a 61 percent chance of another 3-yard rate hike at next month’s meeting and a 3.9 percent chance of a 2-yard rate hike.
“While markets may swing back and forth between inflation and recession, central banks don’t, and their focus seems to be entirely on inflation,” said Marc Chandler, chief market strategist at global FX at Bannockburn.
“The market is used to interpreting the Fed as dovish, and we’re seeing that in the FOMC minutes,” Chandler said, arguing that if Powell expressed concerns about tightening in this talk , the dollar may give back some of the gains.
In terms of economic data, the growth rate of new orders for capital goods in the United States in July slowed from the previous month, indicating that after the contraction in Q2, it is still difficult for business equipment spending to rebound.
The euro was volatile against the dollar, down 0.05% to $0.9963 by press time, almost flat. The European benchmark Dutch TTF natural gas futures contract rose again on Wednesday, with the energy crisis still shrouding the euro zone over slowing growth fears.
Ingvild Borgen Gjerd, foreign exchange analyst at DNB Markets, said a sharp rise in natural gas prices and uncertainty about the future will continue to weigh on the euro for now.
Anxiety over slowing global economic growth put downward pressure on cyclical currencies such as AUD and NZD, with AUD/USD down 0.3% to $0.6906 and NZD/USD down 0.45% to $0.6185.
Sterling was down 0.3% at $1.1797 and USD/JPY was up 0.25% at 137.04 yen.
As of Thursday (25th) Taiwan time nearly 6:00 Price:
The dollar index was at 108.6417. +0.1047% The euro against the US dollar (EUR/USD) was quoted at $0.9969 per euro. +0.0100% GBP/USD (GBP/USD) was quoted at $1.1796. -0.2958% The Australian dollar against the US dollar (AUD/USD) was quoted at 1 Australian dollar to 0.6908. -0.2743% The US dollar against the Canadian dollar (USD/CAD) was quoted at 1.2967 Canadian dollars per US dollar. +0.0849% The U.S. dollar was quoted at 137.08 yen against the Japanese yen (USD/JPY). +0.2633%