The dollar traded higher against major currencies today but remains fragile against the safe haven yen. The U.S. dollar continued its journey north after hitting a five-month low as optimism showed by two of the Federal Reserve officials about the rate hike scenario has changed sentiment to positive.
Euro, Sterling in red
USD showed strength against the euro, which slipped 0.36% to 1.1200 while the sterling plunged to 1.4257, lower by 0.79%. The euro remained under pressure after European Central Bank Chief Economist Peter Praet reiterated that interest rates in the eurozone have not bottomed out and could go further down from here. At the same time, the pound faced heat over Brexit fears as political uncertainty grew thicker in the region.
Though the Japanese Yen traded softer during the earlier hours, it gained resilience during the later Asian afternoon trade. The U.S. Dollar traded 0.23% lower against the yen at 111.68. The outlook for the yen was slightly hit by weak manufacturing PMI in Japan. According to the data published today, Japan’s PMI came in at 49.1, widely lower than the expected reading of 50.6 and previous month’s reading of 50.1. Moreover, a number below 50 represent contraction in the economy.
The U.S. Dollar Index traded 0.28% up at $95.69.
The tailwind for the dollar came from comments from Atlanta Fed President Dennis Lockhart who feels that recent economic indicators have paved the way for a rate hike, which could be set into action by as early as April.
Developments in the U.S.
Meanwhile, San Francisco Fed President John Williams echoed the same sentiment by stating that April or June could be potential months for a rate hike. These statements have rekindled expectations among market participants, who were turned off by the Fed’s commentary published last week, which talked about the slower pace of rate hikes.
Apart from this, the National Association of Retailers reported that existing home sales number dipped 7.1% to 5.08 million in February versus the forecast of a 2.2% fall to 5.34 million units.