Dollar approaches 20-year highs, Fed meeting in focus



By Karen Brettell

NEW YORK, May 2 (Reuters) - The dollar held just below a 20-year high against a basket of currencies on Monday before an expected Federal Reserve rate hike this week, with traders focused on the potential for the U.S. central bank to adopt an even more hawkish tone than many expect.

The Fed has taken an increasingly aggressive approach to monetary policy as it tackles inflation that is soaring at its fastest pace in 40 years. It is expected to hike rates by 50 basis points and announce plans to reduce its $9 trillion balance sheet when it concludes its two-day meeting on Wednesday.

Though the chances are seen as low, some investors are watching for the possibility of a 75 basis point hike, or a faster pace of balance sheet reduction than currently expected.

“A lot of traders are anticipating that the Fed’s not going to back down from this hawkish stance and you could still see some hawkish surprises, and that’s why the dollar is likely to hold on to its gains heading into the meeting,” said Edward Moya, a senior analyst with OANDA in New York.

Comments by Fed Chairman Jerome Powell at the conclusion of the meeting will also be scrutinized for any new indications on whether the Fed will continue to hike rates to battle rising price pressures even if the economy weakens.

U.S. factory activity grew at its slowest pace in more than a year and a half in April amid a rise in workers quitting their jobs, and manufacturers are becoming more anxious about supply.

The dollar was last at 103.72 against a basket of currencies =USD , after reaching 103.93 on Thursday, the highest since Dec. 2002.

The euro EUR=EBS was at $1.0493, after dropping to $1.0470 on Thursday, the lowest since Jan. 2017.

The single currency was hurt after data showed euro zone manufacturing output growth stalled last month as factories struggled to source raw materials, while demand took a knock from steep price increases.

It has suffered from concerns about inflation, growth and energy insecurity as a result of sanctions imposed on Russia after its invasion of Ukraine.

Global growth concerns have also boosted demand for the greenback as China shuts down cities in an attempt to stem the spread of COVID-19. Authorities in Shanghai on Monday reported 58 new cases outside areas under strict lockdown, while Beijing pressed on with testing millions of people.

China's factory activity contracted at a steeper pace in April as the lockdowns halted industrial production and disrupted supply chains, raising fears of a sharp economic slowdown in the second quarter that will weigh on global growth.

The dollar gained 0.6% versus the Chinese yuan in offshore markets, reaching 6.6820 CNH=EBS , just below the 6.6940 touched on Friday, which was the highest since Nov. 2020.

The Japanese yen held just above 20-year lows reached against the dollar on Thursday, when the Bank of Japan strengthened its commitment to keep interest rates ultra-low by vowing to buy unlimited amounts of bonds daily to defend its yield target.

The Japanese currency JPY=EBS was last at 130.14, after after reaching 131.24 on Thursday, the weakest since April 2002.

========================================================

Currency bid prices at 3:00PM (1900 GMT) Description

RIC

Last

U.S. Close Pct Change

YTD Pct

High Bid

Low Bid

Previous

Change

Session

Dollar index

=USD

103.7200

103.2900

+0.43%

8.422%

+103.7400 +103.1000 Euro/Dollar

EUR=EBS

$1.0493

$1.0542

-0.47%

-7.71%

+$1.0575

+$1.0491 Dollar/Yen

JPY=EBS

130.1350

129.8500

+0.21%

+13.03%

+130.4750 +129.6200 Euro/Yen

EURJPY=

136.57

136.90

-0.24%

+4.81%

+137.6300 +136.5300 Dollar/Swiss

CHF=EBS

0.9786

0.9735

+0.54%

+7.30%

+0.9789

+0.9717 Sterling/Dollar GBP=D3

$1.2476

$1.2577

-0.80%

-7.75%

+$1.2596

+$1.2474 Dollar/Canadian CAD=D3

1.2905

1.2865

+0.32%

+2.08%

+1.2914

+1.2843 Aussie/Dollar

AUD=D3

$0.7038

$0.7059

-0.28%

-3.16%

+$0.7082

+$0.7031 Euro/Swiss

EURCHF=

1.0267

1.0263

+0.04%

-0.98%

+1.0291

+1.0229 Euro/Sterling

EURGBP=

0.8408

0.8385

+0.27%

+0.10%

+0.8417

+0.8368 NZ

NZD=D3

$0.6410

$0.6459

-0.66%

-6.25%

+$0.6474

+$0.6413 Dollar/Dollar

Dollar/Norway

NOK=D3

9.4750

9.3700

+1.01%

+7.44%

+9.4845

+9.3770 Euro/Norway

EURNOK=

9.9447

9.8831

+0.62%

-0.68%

+9.9929

+9.8630 Dollar/Sweden

SEK=

9.9319

9.8196

+0.62%

+10.14%

+9.9389

+9.7899 Euro/Sweden

EURSEK=

10.4226

10.3582

+0.62%

+1.84%

+10.4297

+10.3480



World FX rates Link



Additional reporting by Tommy Wilkes in London; Editing by Kirsten Donovan and Chizu Nomiyama

Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.

Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.

Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.

Nous utilisons des cookies pour vous donner la meilleure expérience possible de notre site internet. En savoir plus ou modifier vos paramètres de cookies.

Avertissement sur les risques : votre capital est à risque. Les produits à effet de levier ne sont pas recommandés pour tous. Veuillez consulter notre Divulgation des risques