U.S. Dollar Rises Amid Fed's Rate Hike Prospects
Tokyo-Japan (Mar 11) The U.S. dollar strengthened against the other major currencies in the Asian session on Wednesday, as traders bet that the Federal Reserve would start to raise interest rates in the middle of 2015.
Traders are waiting for the Federal Reserve's monetary policy meeting next week.
The recent upbeat jobs data may lead the central bank to signal that a rate hike is on the horizon in the upcoming FOMC meeting.
Most of the Asian stocks were down amid concerns about the U.S. interest rate hike and on renewed worries over Greece's debt talks.
Greek officials are scheduled to meet today with experts from the organizations overseeing the country's bailout to discuss planned reforms.
Greece remained in focus after European creditors rejected Greece's latest list of reform proposals, saying the debt-ridden country was falling well short of promises it made two weeks ago.
Meanwhile, data from the National Bureau of Statistics showed that China's industrial production and retail sales growth slowed more than expected in February. Industrial production increased 6.8 percent year-on-year in January to February, while it was forecast to grow 7.7 percent. In December, production advanced 7.9 percent.
During January to February, retail sales grew at a pace of 10.7 percent, slower than a 11.9 percent rise seen in December. Sales were expected to rise 11.6 percent.
In the Asian trading today, the U.S. dollar rose to more than 5-week highs of 0.7229 against the NZ dollar and 1.2704 against the Canadian dollar, from yesterday's closing quotes of 0.7270 and 1.2686, respectively. If the greenback extends its uptrend, it is likely to find resistance around 0.70 against the kiwi and 1.29 against the loonie.
Moving away from an early 2-day low of 120.84 against the yen, the greenback rose to 121.49. At yesterday's close, the greenback was trading at 121.11 against the yen. On the upside, 123.01 is seen as the next resistance level for the greenback.
Data from the Bank of Japan showed that its index measuring producer prices was unchanged on month in February, standing at 103.3. That was in line with expectations following the 1.3 percent contraction in January.
On a yearly basis, prices added 0.5 percent, beating forecasts for a gain of 0.4 percent following the 0.3 percent increase in the previous month.
The greenback, which ended yesterday's deals at 1.0696 against the euro appreciated to a 12-year high of 1.0664. The greenback is likely to find resistance around the 1.05 area.
Against the pound and the Swiss franc, the greenback edged up to 1.5061 and 0.9995 from early lows of 1.5086 and 0.9968, respectively. The greenback may test resistance near 1.49 against the pound and 1.03 against the Swiss franc.
The greenback edged up to 0.7587 against the Australian dollar for the first time since May 2009, from yesterday's closing value of 0.7624. The next possible resistance for the greenback is seen around the 0.75 level.
Meanwhile, the euro fell against the other major currencies in the Asian session amid concerns about the situation in Greece.
The representatives of the Greek government and the country's international creditors move to a "technical level" of discussions later today to discuss the country's economic reforms and unlock further funding.
The euro fell to 0.7079 against the pound for the first time since November 2007, from yesterday's closing value of 0.7096. If the euro extends its downtrend, it is likely to find support around the 0.69 area.
Against the Swiss franc, the euro dropped to a 5-day low of 1.0658 from yesterday's closing value of 1.0688. The euro is likely to find support around the 0.97 region.
The euro edged down to 129.46 against the yen, from yesterday's closing value of 129.53. This may be compared to an early more than a 1-1/2-year low of 129.19. The euro may test support near the 124.08 region.
Looking ahead, U.K. industrial and manufacturing production for January is slated for release in the European session.
At 4:00 am ET, European Central Bank President Mario Draghi will deliver a speech at the ECB and its Watchers XVI Conference organized by the Center of Financial Studies in Frankfurt. Other ECB policymakers Peter Praet, Erkki Liikanen and Ewald Nowotny will also be speaking at the event.
In the New York session, U.S. crude oil inventories report for the week ended March 6 is set to be released.
At 11:00 am ET, Bank Of England MPC External Member Martin Weale is expected to speak at the City and Islington Sixth Form College in London.
Source: RTTnews
