© Reuters. Banknotes of the Japanese yen and the US dollar are seen in this illustration photo taken on June 15, 2022. REUTERS/Florence Low/Illustration
by Herbert Lash
NEW YORK (Reuters) – The U.S. dollar held steady against other major currencies on Wednesday as traders wait minutes into the session from the Federal Reserve’s last policy meeting to gather any potential insights into the interest rate outlook.
The dollar – which measures the greenback against a basket of six other currencies, including the euro and the Japanese yen – was essentially flat today at 103.07, after holding in a range of roughly 102.75-103.75 since early June.
The Federal Open Market Committee is scheduled to release the minutes of its latest policy meeting at 14:00 EST (1800 GMT).
Markets are putting an 85.2% chance that the Fed will raise rates by another quarter point in July, but it hasn’t warmed to the Fed’s message that there could be another hike later this year.
“We’ll have to see if the minutes indicate how the Fed really sent a hawkish message home that they haven’t finished raising interest rates yet to bring down inflation,” said Joe Manimbo, senior market analyst in Convera, Washington.
“Of course, another measure of what the Fed is doing will be the jobs report on Friday,” he said.
Friday’s non-farm payrolls report is expected to show that the US economy will add 225,000 jobs in June, and that the unemployment rate fell to 3.6% last month, according to a Reuters poll.
“The economy seems generally resilient, but manufacturing has been in a shambles for eight months, and we will have to see if that leads the Fed to signal that it is not far from the end of the tightening cycle,” said Manimbo.
The euro rose 0.2% to $1.090, while the British pound rose 0.1% to $1.2729.
The dollar was hovering around 144.165 yen, below the 145 threshold that prompted the Japanese authorities to intervene last fall. Last week the dollar briefly rose to 145.07 for the first time since November.
intervention risks?
USDJPY moved broadly in tandem with the greenback, which was almost unchanged on the day at 3.868% after resuming trading after the US Independence Day holiday on Tuesday.
“The market is paying attention to potential intervention risks, but as a medium-term trend, the market is looking for further declines in the yen,” said Shusuke Yamada, senior forex and exchange rate analyst at Bank of America (NYSE) in Tokyo.
“We don’t see a high probability that the Ministry of Finance will intervene at the same level as last year – and if the move is not quick, we may not see intervention below 150 at all,” he added.
The Australian dollar fell in line with the data after data showed services activity in China expanded at the slowest pace for five months in June, the latest sign of a faltering post-pandemic recovery in the world’s second-largest economy.
The Australian dollar fell 0.1% to $0.6683, on its way to snap a four-day series of gains.
Ahead of the Chinese services data, the bank was a bit steadier after a stronger peg to the yuan from the People’s Bank of China, which raised bets on imminent policy support from Beijing.
The yuan rebounded by one touch, rising 0.2% to 7.2509.
Coin bid prices at 9:34 am (1334 GMT)
Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid
previous change
a class
Dollar Index 102.9500 103.0700 -0.10% -0.522% +103.2100 +102.9500
EUR/USD 1.0899 USD 1.0877 + 0.20% + 1.71% + 1.0908 USD + 1.0868 USD
USD/JPY 144.1650 144.4800 -0.21% +9.96% +144.7250 +144.1450
EUR/JPY 157.11 157.16 -0.03% +11.98% +157.7200 +156.8000
USD/CHF 0.8963 0.8975 -0.09% -3.03% +0.8994 +0.8963
GBP/USD 1.2729 USD 1.2714 + 0.11% + 5.25% + 1.2735 USD + 1.2689 USD
USD/CAD 1.3249 1.3220 +0.23% -2.20% +1.3293 +1.3221
AUD/USD $0.6683 $0.6692 -0.14% -1.97% + $0.6698 + $0.6657
EUR/CHF 0.9766 0.9758 +0.08% -1.30% +0.9789 +0.9759
EUR/GBP 0.8560 0.8555 +0.06% -3.21% +0.8575 +0.8555
0.6204 NZD 0.6192 +0.19% -2.29% + 0.6206 NZD + 0.6180
dollars / dollars
Dollar / Norway 10.6440 10.6440 +0.06% +8.52% +10.7090 +10.6190
Euro / Norway 11.6023 11.5939 +0.07% +10.56% +11.6586 +11.5635
Dollar / Sweden 10.8496 10.8117 +0.39% +4.25% +10.8777 +10.8165
Euro / Sweden 11.8212 11.7754 +0.39% +6.02% +11.8361 +11.7767