By Saikat Chatterjee
LONDON, June 27 (Reuters) – The U.S. greenback struggled versus its main rivals on Monday as merchants reassessed the prospects of aggressive rate hikes, whereas the euro led gainers firstly of the European Central Bank’s annual summit in Portugal.
Aggressive curiosity rate hike bets have boosted the greenback in current days with an index rising to a close to two-decade excessive of 105.79 earlier this month. But with some high-frequency knowledge indicators displaying progress momentum beginning to cool, traders are turning bearish on the economic system’s prospects.
“The sharp rise in inflation expectations has resulted in shopper confidence falling to a report low which is able to reinforce fears over a sharper slowdown within the U.S. economic system going ahead,” Mizuho strategists mentioned in a observe.
Against its rivals, the greenback edged 0.2% decrease at 103.86. It hit a late 2002 excessive of 105.79 earlier this month.
Higher terminal pricing of benchmark rates of interest has been a key assist for the greenback however that supply of power has pale in current days.
Futures pricing reveals merchants now anticipating the U.S. Federal Reserve’s benchmark funds rate stabilising round 3.5% from March subsequent yr, a pullback from pricing in charges zooming to round 4% in 2023.
The euro led gainers versus the greenback as the European Central Bank’s annual discussion board in Sintra received underway with ECB President Christine Lagarde and Federal Reserve Chair Jerome Powell each attending the assembly. Markets can be keenly looking ahead to any indicators of future coverage strikes.
The single foreign money was up 0.2% at $1.0580.
Notwithstanding the upbeat sentiment in international markets, commodity currencies got here beneath stress on Monday as knowledge confirmed income at China’s industrial companies shrank once more, albeit at a slower tempo, in May after a pointy fall in April.
Elsewhere, Russia’s rouble weakened within the interbank market as Russia headed for its first sovereign default because the Bolshevik revolution a century in the past.
Cryptocurrencies solidified positive aspects, with the world’s greatest cryptocurrency Bitcoin up 1.4%, buying and selling at $21,170.88 after falling as low as $17,588.88 earlier this month.
(Reporting by Saikat Chatterjee; Editing by Muralikumar Anantharaman)