© Reuters.
Investing.com – The US dollar rose in early European trade on Thursday, recovering from overnight losses, while the pound sterling remained near recent highs ahead of the Bank of England’s latest policy-setting meeting.
At 03:05 ET (07:05 GMT), the US dollar, which measures the greenback against a basket of six other currencies, was trading 0.4% higher at 101.640, after falling about 0.3% in the previous session.
Data released on Wednesday showed a slight dip in April, indicating a pause in the Federal Reserve’s aggressive monetary tightening cycle.
Still, the dollar’s losses were limited as uncertainty persisted over the US debt ceiling, with US Treasury Secretary Janet Yellen warning on Thursday of the potential global economic damage a default could cause.
“The current situation is inevitably putting pressure on risk sentiment and providing support for the dollar,” ING analysts said in a note. “There is growing concern now that it may actually take market selling (in equity or money markets) to break the deadlock.”
Elsewhere, it fell 0.3% to 1.2588, retreating from Wednesday’s high of 1.2679 as it poised to announce its 12th consecutive rate hike at a policy meeting later in the session as headline inflation tackles double digits, the highest. Absolutely. a large developed economy.
ING added: “Last month’s inflation and wage hawkish data suggest the Bank of England will raise interest rates by 25 basis points.” “However, the bank’s recent focus on the late impact of the previous tightening suggests that the bar for subsequent moves remains high.”
It fell 0.3% to 1.0946, back in the middle of last month’s trading range after recent gains on the back of last week’s higher borrowing costs.
François Villeroy de Gallo, French policymaker at the European Central Bank, said on Wednesday that further rate hikes would be “more marginal”, adding that “it is the future impact of previous rate hikes that should mostly allow us to reach our target in Within two years.”
It rose 0.1% to 134.51, after the yen posted strong gains in overnight trading after US yields slipped in the wake of US consumer inflation data.
It fell 0.5% to 0.6744, while it rose 0.1% to 6.9376, as the yuan fell to a two-month low after weak data indicated a tepid economic recovery.