Fed Chairman Jerome Powell has promised to keep raising rates until there is clear and convincing evidence that inflation is under control.
“In particular, Chairman Powell has repeatedly reiterated the Fed’s guidance to deliver additional 50 basis point rate hikes at the June and July FOMC meetings, and we expect the May meeting minutes to provide more color.” about those plans.” TD Securities strategists said in a note to clients.
The 10-year Treasury yield, which hit a 3-1/2-year high in early May, has since fallen about 40 basis points.
Returns briefly hit six-week lows on Wednesday, after data showed new orders for U.S.-made capital goods rose less-than-expected in April.
The dollar index rose 0.5% to 102.25 units. The dollar hit a one-month low after European Central Bank chief Christine Lagarde earlier in the week signaled an end to negative rates in the euro zone in the third quarter.
The euro fell 0.64% to $1.0666, after hitting a one-month high the day before at $1.0748.
Separately, the Reserve Bank of New Zealand became the latest among its peers to raise rates by half a point. While this move was expected, it also provided a harsh policy direction, noting that higher and earlier hikes reduce the risk of persistent inflation.
This helped the New Zealand dollar – known as the kiwi – rise as much as 0.8%, hitting a three-week high of US$0.6514. However, as the greenback gained momentum, it gave back those gains, last trading up 0.01% at $0.6461.
Source: Ambito
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