Summary:
The dollar hit a low against the euro and sterling on Tuesday as softening US economy signals raised chances of earlier Fed rate cuts.
EBC Forex Snapshot, 4 Jun 2024
The dollar languished at its lowest since March against the euro and sterling on Tuesday as signs of a softening US economy boosted the case for earlier Fed interest rate cuts.
The ISM purchasing managers index for manufacturing fell to 48.7 in May, from 49.2 in April, while construction spending slid unexpectedly for a second consecutive month in April.
Following the data, fed funds futures increased the chances of a rate cut in September to around 59.1%, according to LSEG's data. Markets are pricing in 57 bps of ECB cuts this year.
| Citi (as of 27 May) | HSBC (as of 3 Jun) | |||
| support | resistance | support | resistance | |
| EUR/USD | 1.0793 | 1.0895 | 1.0773 | 1.0902 |
| GBP/USD | 1.2300 | 1.2803 | 1.2563 | 1.2857 |
| USD/CHF | 0.8988 | 0.9244 | 0.8950 | 0.9123 |
| AUD/USD | 0.6563 | 0.6729 | 0.6582 | 0.6718 |
| USD/CAD | 1.3478 | 1.3846 | 1.3561 | 1.3717 |
| USD/JPY | 152.12 | 157.68 | 154.67 | 158.86 |
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 dollar dipped from a two-month high but is set for a second consecutive weekly gain as weak labor market signals support faster Fed rate cuts.
2024-10-11
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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