Greenback Strengthens, Central Bank Panel Determines Market Direction
The US dollar strengthened against all major G-10 currencies, while Treasury bonds held relatively steady after experiencing pressure in Tuesday's trading. Market participants now await the release of key US data and the European Central Bank (ECB) forum in Sintra, Portugal.
The Bloomberg Dollar Spot Index rose 0.2%, recording a second consecutive day of gains. Meanwhile, the two-year US Treasury yield held steady at around 4.17% after closing up seven basis points on Tuesday.
Investors await a policy panel discussion that will be attended by several key central bank officials, including Federal Reserve Chairman Kevin Warsh, ECB President Christine Lagarde, and Bank of England Governor Andrew Bailey. Their statements will be closely scrutinized for insights into the direction of global interest rate policy.
On the economic data front, the United States is scheduled to release the ADP Employment Change, ISM Manufacturing, and S&P Global Manufacturing PMI on Wednesday. These data will provide additional clues regarding labor market conditions, manufacturing activity, and the Fed's policy outlook.
The euro weakened against the US dollar, with EUR/USD falling 0.3% to 1.1393. Pressure on the euro emerged after eurozone inflation eased more than expected, as global energy prices fell due to peace efforts in the Middle East.
The Japanese yen weakened again against the US dollar for the third consecutive day. USD/JPY rose 0.2% to a new cycle high of 162.84. Japanese currency officials called intervention an effective strategy and emphasized close communication between Tokyo and Washington regarding the foreign exchange market.
Recent data also showed that confidence among large Japanese manufacturers rose to its highest level since 2018, while inflation expectations hit a new record. In other currency markets, AUD/USD fell 0.4% to 0.6883, while USD/SEK rose 0.5% to 9.7492.
Source: Newsmaker.id
