Dollar Steadies Ahead of Fed. Chair Appearance
The US dollar was only slightly firmer against its major trading partners early Monday, ahead of the first comments from Federal Reserve Chairman Jerome Powell since his post-meeting press conference on Wednesday.
Powell will speak to the National Association for Business Economics annual policy conference on the economic outlook at noon. Atlanta Fed President Raphael Bostic, a nonvoter on the Federal Open Market Committee (FOMC) this year, will speak at the same conference today.
Markets are still digesting the FOMC’s Wednesday decision to raise the federal funds rate by 25-basis points and alter its formal guidance to suggest several additional increases over the next two years. READ: U.S. Dollar Firmer Early Monday to Start 2022
Monday’s data schedule is light, with only the Chicago Fed’s national activity index for February scheduled today. The week’s data highlights include new home sales for February on Wednesday, weekly jobless claims on Thursday and the revised Michigan Sentiment index for March on Friday.
A quick summary of foreign exchange activity heading into Monday shows that EUR-USD fell slightly to 1.1048 from 1.1069 at the Friday US close but was up from 1.1038 at the same point Friday morning.
German PPI rose less than expected in February after a faster pace in January, data released earlier Monday showed. European Central Bank President Christine Lagarde said Monday that the ECB and the Federal Reserve will be tightening policy at different speeds due to the US economy advancing faster but noted that she doesn’t see a chance of stagflation in Europe despite the situation in Ukraine.
GBP-USD fell to 1.3133 from 1.3181 at the Friday US close and was up slightly from 1.3125 at the same point Friday morning. The UK’s Rightmove survey showed that home prices rose at a slower pace in March than in February, data released overnight showed.
The Bank of England raised its key interest rate another 25 basis points last week, but its forward guidance showed less certainty about future increases due to the situation in Ukraine.
USD-JPY ticked up to 119.2203 from 119.2016 at the Friday US close and from 119.0696 at the same point Friday morning. There were no Japanese data released overnight. The Bank of Japan kept its policy rate unchanged last week despite rising inflationary pressures. Markets are closed in Japan on Monday.
USD-CAD rose slightly to 1.2616 from 1.2608 at the Friday US close and was in line with the 1.2619 level at the same point Friday morning. There is no Canadian data scheduled for Monday, so the focus is on inflation data due for release on Tuesday. #Dollar Steadies Ahead of Fed. Chair Appearance
