The dollar strengthened as many investors expect a hike by the Fed in May

There is a tug of war between those who are optimistic that the Fed will soon end its interest rate tightening program due to the weakness we are seeing in the economy.

New York ( – The US dollar continues rebounds against a basket of other major currencies in late Monday trading (Tuesday morning WIB), after the release of US economic data and more investors thought the Fed would raise interest rates by 25 basis points in May.

The dollar index, which measures greenbacks against six other major currencies, it was up 0.48 percent to 102.1082 in late trade.

In late New York trading, the euro fell to US$1.0926 from US$1.0999 of the previous session, and the British pound fell to US$1.2373 from US$1.2414 in the previous session.

Also read: The dollar “rebounded” as expectations of a Fed rate hike increased

The US dollar bought 134.3900 Japanese yen, higher than 133.79 Japanese yen in the previous session. The US dollar rose to 0.8988 Swiss franc from 0.8939 Swiss franc, and it was up to 1.3397 Canadian dollars from 1.3360 Canadian dollars. The US dollar increased to 10.3568 Swedish krona from 10.3245 Swedish krona.

The New York Federal Reserve reported on Monday (17/4/2023) that the state’s manufacturing index was 10.8 in April, up from -24.6 in March, which marked the biggest monthly increase in a year. Economists had expected a reading of -18.3.

The National Association of Home Builders (NAHB) reported Monday (17/4/2023) that its housing market index hit 45 in April, up from 44 in March. This was in line with economists’ expectations.

Yields on US Treasury bonds continued to rise Monday, with the two-year Treasury rate moving toward 4.2 percent and the 10-year rate moving toward 3.6 percent.

Also read: The dollar “rebounded” at the start of the Asian session on expectations for a Fed hike

The Fed has a nearly 90 percent probability of raising its benchmark interest rate by 25 basis points by early May, up from a 78 percent probability last Friday (14/4/2023), according to data from the CME FedWatch Tool on Monday (17/4/2023). afternoon.

“There’s a tug of war between those who are optimistic that the Fed will end its rate tightening program soon because of the weakness we’re seeing in the economy … and those who believe that the Fed will be forced to raise rates for longer because the economy doesn’t in any sense give up,” Sam Stovall, chief investment strategist at CFRA Research, said Monday (17/4/2023).

Translator: Apep Suhendar
Editor: Nusarina Yuliastuti


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