© Reuters.
By Peter Nurse
Investing.com – Purchasing managers’ indices for the US economy were released, all positive and indicating that the US economy is in an expansion zone, giving the Fed more room to move and raise interest rates freely, members said this morning.
After the data, the US dollar index rose to 101.815, up by 0.26%.
The US dollar rallied early in the European session on Friday, and looks poised for its first weekly gain in more than a month amid mounting expectations that the Federal Reserve will tighten monetary policy next month.
At 07:05 GMT, it was trading up 0.1% higher at 101.720, on track for a weekly gain of around 0.3%, after five straight weeks of losses.
Comments from a number of Fed policy makers this week indicated that the US central bank raised by 25 basis points in early May, arguing that inflation remains at crisis levels and that monetary policy should be tightened and interest rates should remain at high levels.
However, this could be the last increase of the cycle as economic data indicates a slowdown in the US economy, and financial markets are pricing in interest rate cuts as early as July and into the end of the year.
Data for April is due later on Friday, which will provide more clarity on the overall economic health of the world’s largest economy.
The pair fell 0.2% to 1.0947.
European Central Bank President Christine Lagarde said Thursday that the European Central Bank’s monetary policy “still has some way to go” to bring inflation back towards its 2% target, pointing to more…
“The ECB’s narrative is moderately supportive of the euro, but the international environment does not favor a significant rally above 1.10 in EUR/USD,” analysts at ING said in a note.
Decreased 0.3% to 1.2403, after a larger-than-expected decline of 0.9% in March compared to February, with British consumers weighed by a rise in rate which remained in double digits in March.
In other news, the pair fell 0.8% to 0.6688, and fell 0.3% to 133.88, with losses limited after data showed more-than-expected growth in March, while rising at a slower-than-expected pace.
The price rose 0.3% to 6.8948, after data showed that China’s important manufacturing sector was still suffering from sluggish demand.
