- Disappointing ISM U.S. factory data hit dollar early
- Futures imply traders cut bets on U.S. rate cut at year-end
- Trading light due to May Day in China, Europe
- Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(New throughout, updates rates, market activity, comments)
The dollar rose against a basket of other currencies on Wednesday as U.S. Federal Reserve Chairman Jerome Powell said the central bank's current policy stance is appropriate, reducing expectations for a rate cut.
The greenback rebounded from earlier losses tied to a disappointing report on U.S. manufacturing activity.
"The dollar turned higher after Mr. Powell indicated that the forces weighing on inflation may prove temporary," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. "The chairman’s remarks skewed the Fed’s overall tone today as more hawkish than dovish."
In March, signaled it would not raise rates in 2019. Downbeat domestic and overseas figures have now stoked speculation policy makers could reduce key U.S. rates to avert a recession.
"We think our policy stance is appropriate at the moment; we don’t see a strong case for moving it in either direction," Powell said in a press conference after the Fed's two-day policy meeting.
In late U.S. trading, an index that tracks the dollar against the euro, yen, sterling and three other currencies =USD was up 0.21% at 97.679.
Interest rates futures implied traders now see a 55% chance of a Fed rate cut at year-end, down from 66% late on Tuesday, according to CME Group's FedWatch program.
Earlier, the dollar slipped after the Institute for Supply Management said its barometer on the U.S. factory sector deteriorated in April to a 2-1/2 year low. The surprise downturn was offset by a report from ADP that U.S. companies added 275,000 workers last month, the most in nine months.
Some of the dollar's gains in April came against the euro, on growing concerns about a slowdown in the euro zone economy.
However, relatively strong euro zone economic data on Tuesday prompted some hedge funds to cover short positions in the euro, lifting it above $1.12.
The euro EUR=EBS extended gains before Powell's press conference. It hit a one-week high at $1.125 before falling 0.21% to $1.11925.
The dollar JPY=EBS ended little changed at 111.415 yen, rebounding from a low of 111 yen.
======================================================== Currency bid prices at 4:23PM (2023 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1191 $1.1215 -0.21% -2.42% +1.1265 +1.1189 Dollar/Yen JPY= 111.4000 111.4100 -0.01% +1.03% +111.6100 +111.0600 Euro/Yen EURJPY= 124.75 125.01 -0.21% -1.16% +125.2200 +124.7500 Dollar/Swiss CHF= 1.0177 1.0190 -0.13% +3.70% +1.0198 +1.0127 Sterling/Dollar GBP= 1.3047 1.3031 +0.12% +2.26% +1.3101 +1.3031 Dollar/Canadian CAD= 1.3443 1.3386 +0.43% -1.42% +1.3461 +1.3377 Australian/Doll AUD= 0.7011 0.7048 -0.52% -0.54% +0.7061 +0.7008 arEuro/Swiss EURCHF= 1.1393 1.1428 -0.31% +1.24% +1.1439 +1.1392 Euro/Sterling EURGBP= 0.8579 0.8605 -0.30% -4.51% +0.8607 +0.8577 NZ NZD= 0.6618 0.6673 -0.82% -1.47% +0.6678 +0.6617 Dollar/DollarDollar/Norway NOK= 8.6738 8.6277 +0.53% +0.41% +8.6793 +8.6083 Euro/Norway EURNOK= 9.7104 9.6789 +0.33% -1.97% +9.7265 +9.6705 Dollar/Sweden SEK= 9.5364 9.4900 +0.28% +6.39% +9.5413 +9.4703 Euro/Sweden EURSEK= 10.6776 10.6480 +0.28% +4.03% +10.6938 +10.6427 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ New Zealand dollar vs U.S. dollar http//tmsnrt.rs/2DIskBF^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
