Dollar stabilizes ahead of Fed minutes as debt negotiations continue
Investing.com - The U.S. dollar stabilized in early European trade Wednesday, remaining close to last session’s two-month high given the lack of progress in negotiations over raising the U.S. debt ceiling.
At 02:55 ET (06:55 GMT), the Dollar Index , which tracks the greenback against a basket of six other currencies, traded largely unchanged at 103.395, just below the 103.65 two-month peak seen late Tuesday.
While talks between both political parties continue over the lifting of the U.S. government's $31.4 trillion debt ceiling, any progress seems to be hard won and there are few signs of a deal being reached anytime soon.
There’s now just over a week before the early-June deadline that U.S. Treasury Secretary Janet Yellen said is when it’s “highly likely” that her department will run out of sufficient cash to function as normal.
The minutes of the Fed’s May meeting, due later in the day, will be studied carefully for any cues on when the central bank plans to pause its rate hike cycle.
A number of Fed speakers over the last week have talked in a hawkish manner about the central bank’s monetary policy, suggesting U.S. rates are likely to stay higher for longer.
EUR/USD rose 0.1% to 1.0780 ahead of the release of the widely watched German Ifo business climate index for May, which is expected to show a slight deterioration in confidence in Europe’s largest economy.
GBP/USD climbed 0.3% to 1.2452, bouncing off Tuesday’s one-month low, after U.K. headline CPI fell by less than expected to 8.7% in April from March's 10.1%, while core inflation , which excludes volatile energy and food prices, rose to 6.8% - the highest rate since March 1992.
The Bank of England lifted interest rates by 25 basis points earlier this month, and these numbers are likely to reinforce expectations that the central bank will be forced to raise interest rates again in June.
USD/JPY edged higher to 138.64, having reached a six-month high overnight, the risk-sensitive AUD/USD fell 0.4% to 0.652, while NZD/USD slumped 1.7% to 0.6144 after the Reserve Bank of New Zealand hiked interest rates as expected, but signaled a potential pause in its nearly two-year-long rate hike cycle.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb
Drop an image here or