Summary:
Investors await clues on US interest rates as the dollar holds steady. Fed officials are cautious despite weak inflation signals.
EBC Forex Snapshot,20 May 2024
The dollar was broadly steady on Monday as investors awaited further clues to help chart the US interest rate path. Fed officials have sounded words of caution about when rates may fall despite weak inflation report.
The yen hovered around 156 per dollar after remaining within narrow ranges in recent days, reflecting Japan's economy's unexpected contraction in Q1, accompanied by a slump in exports.
Japan's weak consumption may heighten, rather than tame, already growing political pressure on the central bank to raise interest rates to slow the declines blamed for hurting households via higher import costs.
| Citi (as of 13 May) | HSBC (as of 20 May) | |||
| support | resistance | support | resistance | |
| EUR/USD | 1.0601 | 1.0885 | 1.0714 | 1.0960 |
| GBP/USD | 1.2300 | 1.2709 | 1.2524 | 1.2792 |
| USD/CHF | 0.8999 | 0.9244 | 0.8975 | 0.9213 |
| AUD/USD | 0.6443 | 0.6668 | 0.6532 | 0.6783 |
| USD/CAD | 1.3478 | 1.3846 | 1.3536 | 1.3733 |
| USD/JPY | 152.12 | 157.68 | 152.33 | 158.49 |
The green numbers in the table indicate that the data has increased compared with the previous time; the red numbers indicate that the data has decreased compared with the previous time; and the black numbers indicate that the data has remained unchanged.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The dollar held gains and rose slightly in Asia Monday as Japan's holiday cut liquidity, focusing attention on China's disappointing stimulus.
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The US hovered near a two-month high on Thursday as markets grew confident in the Fed's patient monetary policy ahead of a key inflation report.
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