SINGAPORE – The dollar began the last trading week of the month on a firmer footing, with traders awaiting a slew of central bank policy meetings that could signal how soon the steep increases in interest rates globally might come to an end.
US Federal Reserve policymakers are widely expected to raise rates by another 25 basis points at next week’s Federal Open Market Committee (FOMC) meeting, though the focus will be on the guidance for the future rate path.
While recent economic data have pointed to slowing US growth, parts of the economy continue to show resilience while inflation remains sticky, leaving traders debating the scale of rate cuts expected as early as July through to the end of the year.
The US dollar rose broadly against most major currencies in Asia trade, with the euro and sterling slipping 0.07 percent to $1.0981 and 0.06 percent to $1.2437, respectively.
The Aussie fell 0.29 percent to $0.6674.
The US dollar index rose 0.13 percent to 101.81, but was on course for a monthly loss of more than 0.7 percent, having fallen over 2 percent in March.
Data released on Friday showed that US and euro zone business activity gathered pace in April, reducing concerns about an impending recession in major economies.
“The takeaway from the various PMIs is that the services sector both in Europe and the US seems to be pretty resilient,” said Ray Attrill, head of FX strategy at National Australia Bank.
“There’s nothing, as yet, to hang your hat on rate cuts in the second half of the year,” he added, noting inflation-related indicators would need to show more evidence of price pressures subsiding. – Reuters
