© Reuters.
By Peter Nurse
Investing.com – The US dollar rose at the start of the European session on Friday, looking poised for its first weekly gain in more than a month amid mounting expectations that the Federal Reserve will tighten monetary policy further next month.
At 03:05 ET (07:05 GMT), which measures the greenback against a basket of six other currencies, it was trading 0.1% higher at 101.720, and was on track for a weekly gain of about 0.3%, after five straight weeks of losses. losses.
Comments from a number of Fed policymakers this week pointed to the US central bank raising by 25 basis points in early May, arguing that inflation remains at problematic levels and that monetary policy still needs to be tightened.
However, this could be the last increase of the cycle as economic data points to a slowdown in the US economy, and money markets are pricing in interest rate cuts as early as July and into the end of the year.
Flash US data for April is due later on Friday, which will provide more clarity on the overall economic health of the world’s largest economy.
It fell 0.2% to 1.0947, ahead of the release of manufacturing and services PMI data for a number of eurozone countries.
Although manufacturing surveys are stuck in contraction territory, the services sector is expected to remain strong, adding to inflationary pressure.
European Central Bank President Christine Lagarde said Thursday that the European Central Bank’s monetary policy “still has a long way to go” to bring inflation back toward its 2% target, pointing to more to come.
“The ECB story is moderately supportive of the euro, but the international environment does not favor a significant rally above 1.10 in EUR/USD,” analysts at ING said in a note.
It fell 0.3% to 1.2403, after the UK fell by a larger-than-expected 0.9% in March compared to February, with British consumers weighed by the higher rate, which remained in double digits in March.
Elsewhere, it fell 0.8% to 0.6688, and fell 0.3% to 133.88, with limited losses after data showed more-than-expected growth in March, while it rose at a slower-than-expected pace.
It rose 0.3% to 6.8948, with the yuan hitting after data showed that China’s important manufacturing sector was still suffering from sluggish demand.