The super dollar is close to 5-week highs and the focus is on the US debt ceiling

The super dollar is close to 5-week highs and the focus is on the US debt ceiling

He dollar It was trading on Tuesday just below a five-week high it reached the day before, while the pound erased some of its losses after a rise in UK unemployment figures. suggested that fewer rate hikes by the Bank of England might be needed in the coming months to reduce inflation.

The dollar index, which measures the greenback’s performance against a basket of six currencies, was down 0.14% at 102.29, after hitting 102.75 in early trading on Monday, its highest level since May 10. April.

The dollar was down 0.3% against the Swiss franc at $0.8928 and was down 0.2% against the yen at 135.8 yen. The interest rate sensitive Japanese currency also reacted to lower US yields.

Many things that kept investors in suspense, such as the important meeting between the president of the United States, Joe Biden, and the speaker of the House of Representatives, the Republican Kevin McCarthy, with just over two weeks to go before the US government run out of money to pay your bills.

Analysts say debt ceiling concerns are part of the reason for the recent strength of the dollar, which also often benefits from a “flight to safety” as well as changing expectations about central bank policy. .

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Elsewhere, sterling fell as much as 0.5% against the dollar at $1.2460 and also weakened to 87.17 pence per euro after the UK unemployment rate unexpectedly rose as high as 3.9% in the three months to March, as more people sought to re-enter the job market. Later it erased its losses and operated flat against the dollar.

The market is pricing in at least one more 25 basis point rate hike from the Bank of England, with a good chance of another hike, but this data could make the Bank of England more cautious.

The euro was trading at $1.0893, up slightly, largely due to plummeting German investor confidence and confirmation from the EU statistics agency that eurozone growth in the first quarter was 0.1% quarter-on-quarter.

Source: Ambito

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