US dollar flat to modestly higher as upbeat data backs May rate hike By Reuters

By Gertrude Chavez-Dreyfus

NEW YORK (Reuters) – The US dollar was little changed to a slight gain against major currencies on Friday, as business activity data indicated that the world’s largest economy remained resilient, supporting expectations of another 25 basis point interest rate hike by the Federal Reserve. . At a policy meeting next month.

Against the commodity currencies, the greenback also rose. Overall, the bank was on track for its first weekly gain in nearly two months on expectations of an interest rate hike for the month of May.

The data showed on Friday that the US Standard & Poor’s (NYSE:) composite PMI output index, which tracks the manufacturing and service sectors, rose to 53.5 this month, the highest level since May last year and followed the final reading at 52.3 in March. It was the third consecutive month that the PMI has remained above 50, indicating growth in the private sector.

“Despite the downturn in economic activity, spreads remain supportive of the dollar, and the US remains the cleanest shirt in the global economic landscape,” said Carl Chamota, chief market strategist at Corpay in Toronto.

In the case of the euro, the sudden rebound in the eurozone economy in April supported the currency.

The dollar index, which measures the performance of the US currency against six others, settled at 101.76 and is heading for a weekly gain of about 0.2%, the first since late February.

However, the outlook for the greenback remained bearish as investors braced for the end of the Fed’s tightening cycle. Although Fed officials have been on the hook to point out that inflation remains uncomfortably high and interest rates should continue to rise.

Financial markets on Friday continued to show expectations of a quarter-point hike in the US interest rate next month, which is positive for the dollar, followed by a pause in June. The futures market has also priced in price cuts this year as the economy slows.

“Money is no longer so strongly supported by the Fed’s message of raising interest rates, and other currencies are pouring in as a result of growing optimism globally about a second half of the year that will not only see a drop in inflation, but will avoid a very strong recession,” said Juan Perez, Director of Commerce, Monex USA. in Washington “.

Elsewhere, the pace of recovery in the eurozone unexpectedly accelerated this month, thanks to a spurt in demand for the services sector offsetting a growing slump in manufacturing.

The HCOB’s Composite Purchasing Managers’ Index (PMI), which is also compiled by S&P Global and is considered a good measure of overall economic health in the eurozone, jumped to an 11-month peak of 54.4 in April from 53.7 in March.

The euro was last up 0.1 percent against the dollar at $1.0982, recovering from a session low of $1.0938.

In other currencies, the British pound fell 0.1% to $1.2431, after falling as much as 0.54% earlier.

The yen was one of the strongest performers earlier in the session, rising to a one-week high against the dollar, amid data showing Japanese consumer inflation was stable above the central bank’s March target. This pressured the Bank of Japan to abandon its ultra-loose stance on monetary policy.

Incoming Governor Kazuo Ueda will chair his first policy meeting next week for the Bank of Japan.

The dollar was last slightly lower against the Japanese unit at 134.17 yen.

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Coin bid prices at 3:26 PM (1926 GMT)

Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid

previous change

a class

Dollar index 101.7500 101.7800 -0.01% -1.681% +102.1200 +101.6400

EUR/USD 1.0982 USD 1.0972 + 0.08% + 2.48% + 1.0993 USD + 1.0938 USD

USD/JPY 134.1500 134.2400 -0.06% +2.33% +134.4850 +133.5500

EUR/JPY 147.32 147.27 +0.03% +5.00% +147.5600 +146.4100

USD/CHF 0.8927 0.8925 +0.04% -3.43% +0.8954 +0.8909

GBP/USD $1.2434 $1.2444 -0.10% + 2.80% + $1.2446 + $1.2368

USD/CAD 1.3544 1.3479 +0.50% -0.02% +1.3563 +1.3467

AUD/USD $0.6687 $0.6743 -0.84% ​​-1.91% + $0.6745 + $0.6678

EUR/CHF 0.9803 0.9789 +0.14% -0.93% +0.9807 +0.9787

EUR/GBP 0.8831 0.8814 +0.19% -0.15% +0.8861 +0.8813

0.6135 USD 0.6178 -0.73% -3.41% + 0.6180 USD + 0.6127 USD

dollars / dollars

Dollar / Norway 10.5860 10.6000 -0.04% +7.97% +10.6790 +10.5810

Euro / Norway 11.6230 11.6099 +0.11% +10.76% +11.6940 +11.5896

Dollar / Sweden 10.3080 10.3054 +0.19% -0.96% +10.3589 +10.2986

Euro / Sweden 11.3221 11.3010 +0.19% +1.55% +11.3415 +11.2990