AGL 38.50 Increased By ▲ 0.02 (0.05%)
AIRLINK 202.00 Decreased By ▼ -1.02 (-0.5%)
BOP 10.03 Decreased By ▼ -0.14 (-1.38%)
CNERGY 6.37 Decreased By ▼ -0.17 (-2.6%)
DCL 9.40 Decreased By ▼ -0.18 (-1.88%)
DFML 39.50 Decreased By ▼ -0.52 (-1.3%)
DGKC 96.30 Decreased By ▼ -1.78 (-1.81%)
FCCL 34.88 Decreased By ▼ -0.08 (-0.23%)
FFBL 82.01 Decreased By ▼ -4.42 (-5.11%)
FFL 13.69 Decreased By ▼ -0.21 (-1.51%)
HUBC 130.29 Decreased By ▼ -1.28 (-0.97%)
HUMNL 13.93 Decreased By ▼ -0.09 (-0.64%)
KEL 5.47 Decreased By ▼ -0.14 (-2.5%)
KOSM 7.35 Increased By ▲ 0.08 (1.1%)
MLCF 45.76 Increased By ▲ 0.17 (0.37%)
NBP 60.15 Decreased By ▼ -6.23 (-9.39%)
OGDC 220.00 Decreased By ▼ -0.76 (-0.34%)
PAEL 38.50 Increased By ▲ 0.02 (0.05%)
PIBTL 8.66 Decreased By ▼ -0.25 (-2.81%)
PPL 197.50 Decreased By ▼ -0.38 (-0.19%)
PRL 38.73 Decreased By ▼ -0.30 (-0.77%)
PTC 25.45 Decreased By ▼ -0.02 (-0.08%)
SEARL 108.20 Increased By ▲ 5.15 (5%)
TELE 8.85 Decreased By ▼ -0.17 (-1.88%)
TOMCL 36.15 Decreased By ▼ -0.26 (-0.71%)
TPLP 13.98 Increased By ▲ 0.23 (1.67%)
TREET 24.80 Decreased By ▼ -0.32 (-1.27%)
TRG 57.79 Decreased By ▼ -0.25 (-0.43%)
UNITY 33.70 Increased By ▲ 0.03 (0.09%)
WTL 1.68 Decreased By ▼ -0.03 (-1.75%)
BR100 11,724 Decreased By -166 (-1.4%)
BR30 36,834 Decreased By -522.3 (-1.4%)
KSE100 109,290 Decreased By -1780.4 (-1.6%)
KSE30 34,256 Decreased By -653.2 (-1.87%)

NEW YORK: The dollar slipped on Wednesday ahead of the conclusion of the Federal Reserve’s two-day policy meeting, with investors focused on whether Fed Chair Jerome Powell will adopt a more hawkish tone as inflation remains stubbornly above its 2% annual target.

Stickier than expected consumer price inflation in March dashed hopes that elevated readings in January and February were anomalies, leading traders to push back expectations on when the US central bank is likely to cut interest rates.

Fed fund futures traders price in only one rate cut this year, with a roughly 50% probability it will occur in September. Traders had previously expected three rate cuts this year, likely beginning in June.

The dollar index fell 0.11% to 106.20, after earlier reaching 106.49, the highest since April 16. A break above the 106.51 would be the highest since early November.

“The market is clearly concerned that the Fed will take some hawkish steps,” said Adam Button, chief currency analyst at ForexLive in Toronto.

However, Powell is unlikely to put the prospect of new interest rate hikes on the table on Wednesday, and is instead likely to promote holding rates higher for longer.

That could disappoint investors and send the dollar lower against peers.

“We’ve seen this play out dozens of times where the market gets frightened about a hawkish Fed and then Powell is neutral or dovish,” Button said.

The ADP Employment report on Wednesday showed that US private payrolls increased more than expected in April while data for the prior month was revised higher. A US Labor Department report, meanwhile, showed that job openings fell in March.

Separately US manufacturing contracted in April amid a decline in orders after briefly expanding in the prior month, while a measure of prices paid by for inputs approached a two-year high.

The euro gained 0.14% to $1.0682. The pound weakened 0.09% to $1.2479.

The dollar fell 0.17% to 157.53 yen.

The Japanese currency rallied sharply on Monday, with traders citing yen-buying intervention by Japanese authorities to try to underpin a currency languishing at levels last seen over three decades ago.

The dollar has since crept higher, raising questions on whether additional steps will be needed to stop further yen weakness. The Japanese currency is suffering from a wide interest rate differential that makes borrowing in the yen and investing in US assets attractive.

“There aren’t many options for Japan. In one way intervention is just an invitation to buy the dip for most FX traders at better levels,” said Button. “Dollar/yen will not stop climbing until the US economy cools off.” In cryptocurrencies, bitcoin fell 4.41% to $57,226 after earlier reaching $56,483, the lowest since Feb. 27.

Comments

Comments are closed.