Written by Ray Wee
Singapore, June 1 (Reuters) – The U.S. House of Representatives’ vote to approve the suspension of the debt ceiling helped the dollar as it fell from a two-month high on Thursday as investors reduced expectations that the U.S. Federal Reserve would raise interest rates this month. rice field.
US House split Wednesday passed it A bill to suspend the $31.4 trillion debt ceiling has been put forward, and the focus is on how the bill will play out in the Democratic-led Senate just days before the federal government is expected to run out of money to pay the bill.
The dollar did little to react to the news initially, but rose throughout the Asian trading day, making up for some of the early losses.
against dollar and euro Euro = EBS The pound fell 0.07% to $1.0681. GBP=D3 It fell 0.01% to $1.24395.
“Our view is that the U.S. government will avoid a default that could derail the U.S. and, by extension, the global economy,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.
“If today’s vote is successful, I think the dollar will get a little more support.”
US dollar index = USD Although it fell back, it gained 0.13% to 104.28. It fell from a more than two-month high in the previous session as traders dwindled hopes of another rate hike by the Federal Reserve this month.
Fed officials, including those appointed as Vice Chairman pointed Ahead of the June rate hike ‘skip’, the US central bank has given time to assess the impact of the tightening cycle so far on still-robust inflation data.
The market is currently pricing in an approximate price 38% According to the CME FedWatch tool, there is a 25 basis point (bp) probability that the Fed will raise rates at its next meeting, compared to nearly 67% the day before.
“Recent U.S. economic data support another near-term rate hike, but our baseline is that the FOMC has already completed its current tightening cycle,” Kong said.
Otherwise Japanese Yen JPY=EBS The dollar fell nearly 0.2% to 139.59.
Japanese financial authorities met Earlier this week, the yen fell to a six-month low against the dollar. The country’s top diplomat said Japan was closely monitoring currency developments and was not ruling out any options.
Steady recovery in China
China’s offshore renminbi in Asia CNH=D3 The last buy was at $7.1184 to the dollar, which was supported by a slight distance from the six-month lows hit in the previous session. Private company survey Thursday’s announcement showed factory activity in China unexpectedly picked up in May after a decline in April.
The yuan fell nearly 3% against the dollar in May in both onshore and offshore markets as China’s post-coronavirus economic recovery gathered momentum.CNY/
The official Manufacturing Purchasing Managers Index (PMI) was released on Wednesday. data China’s factory activity contracted earlier than expected in May, dropping to a five-month low of 48.8, it was revealed.
OCBC currency strategist Christopher Wong said: “Considering the yuan’s negative carry, reversing momentum in China’s economic reopening, and foreign capital outflows, the path of least resistance for the U.S. dollar/yuan on the net is to the upside. It is.”
Elsewhere, Australian dollars Australian dollar = D3 It recently rose 0.11 percent to $0.6511 after Thursday’s China factory report.
kiwi NZD=D3 $0.6010, down 0.18%.
Both antipodes, often used as liquidity proxies for the yuan, fell to their lowest in more than half a year in the last trade.
world exchange rates https://tmsnrt.rs/2RBWI5E
(Reporting by Rae Wee, Editing by Christian Schmollinger and Kim Coghill)
The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.