- Home
- >
- Daily Accents
- >
- Dollar remains near session low amid lackluster economic data
Dollar remains near session low amid lackluster economic data
Rating:
Loading...The dollar remained near daily lows amid muted flows coupled with a hangover from weaker-than-expected economic data and jawboning by President Donald Trump, who last week said the currency was too strong.
Analysts are recalibrating their expectations for future Fed rate hikes following a string of weaker-than-forecast U.S. data including April Empire Manufacturing on Monday and March consumer prices and retail sales on Friday. The Bloomberg dollar index breached technical support from the 200-day moving average, as it briefly did in late March, opening risk the index could drop further. The dollar also slumped as the 10-year Treasury yield touched the lowest since Nov. 17 before rebounding.
The market implied probability of a May rate increase by the Fed stands at less than 15%, while the odds of a hike in June or July are seen at ~50%. Fed Chair Yellen said last week that “it’s appropriate to gradually raise the federal funds rate toward a more neutral stance” if the economy keeps on track.
At the same time, expectations for the so-called Trump reflation trade that had supported the dollar and Treasury yields have been delayed amid little progress on tax reform. Trump last week said the currency is “getting too strong.”
GBP/USD is trading at 1.2573 after rising to a fresh high at 1.2596 earlier in the session. Price action suggested a few stop-loss buy orders may have been triggered above the 1.2570 area that corresponded to technical resistance from the April 13 high; GBP faces further resistance from its 200-DMA at 1.2627.
USD/JPY returned to midrange as Treasury yields rose to session highs; session low 108.13 seen in Asian hours was lowest since Nov. 15. USD/JPY has breached its 200-DMA that was expected to provide support and the pair may further erode its post-election gain as traders eye technical targets as low as 105.00 or below.
EUR/USD touched 1.0670 as the region counts down to the first round of French presidential elections on Sunday, with the four leading candidates locked in a tight race, according to latest polls. EUR breached its 55-DMA 1.0662 before stalling at resistance near the Wednesday/Thursday highs from last week at 1.0675/78.
Source: Bloomberg
Trader Senan Fuchedzhiev
Varchev Traders Read more:
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
