The super dollar rose this monday april 10 following the release on Friday of a strong employment report for March, which raised expectations that the Federal Reserve raise interest rates again in May, while the yen eased after the new Bank of Japan governor indicated he is in no rush to scale back his massive stimulus.
US employers maintained a strong hiring pace in Marchadding 236,000 jobs, pushing the unemployment rate back to 3.5% and signaling labor market resilience that will keep the Fed on track to raise rates yet again next month.
“In my view, the market confidence pendulum will swing back in favor of a Fed rate hike early next month.”said Marc Chandler of Bannockburn Global Forex in New York, noting that momentum indicators for dollar pairs they are “overloaded” and are likely to support dollar strength in the near term.
The dollar index gained 0.6% to 102.55 units, its highest since April 3. The euro was down 0.36% at $1.0859, its lowest since the same date.
Americans said last month that access to credit was at its most difficult level in nearly a decade, since they were also preparing for higher levels of inflation in the coming yearsa New York Fed report said Monday .
Operators are also closely watching the data on bank loans after the failure of Silicon Valley Bank in mid-March raised fears about contagion in the financial system and led the Government and the Fed to intervene to shore up liquidity in the sector.
Wednesday’s consumer price data is the main focus of attention for the US economy this week and is expected to show headline inflation accelerated to 0.3% in March, with core inflation at 0.4%.
Fed funds futures traders see a 70% chance that the entity will raise rates another 25 basis points at its meeting on May 2-3.
The dollar appreciated against the yen after the new governor of the Japanese central bank, Kazuo Ueda, claimed that for the moment it is advisable to maintain the ultra-lax monetary policy of the entity, since inflation has not yet reached 2% as a trend.
The greenback was up 1.12% at 133.615 yen, its highest level since April 3.
Source: Ambito
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