U.S. Dollar Climbs As Fed Chair Jerome Powell Signals Continued Policy Tightening
November 03 2022 - 1:16AM
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Extending the previous day's rally, the U.S. dollar advanced
against its major counterparts in the European session on Thursday,
as comments from Federal Reserve Chairman Jerome Powell dampened
hopes of a potential pivot in the monetary policy.
The Fed lifted its benchmark rate by 75 basis points to a range
of 3.75 percent to 4 percent and Powell said that it was
"premature" to consider a pause in future hikes.
The Fed chief said that the central bank has ways to go with
interest rates before it get to the level that's sufficiently
restrictive.
Powell added that rates are likely to go higher than previously
expected, raising the possibility of a 5 percent terminal rate by
next May.
Investors await U.S. non-farm payrolls report due on Friday for
more clues on the central bank's tightening path.
The greenback appreciated to near 2-week highs of 1.0116 against
the franc and 0.9761 against the euro, off its early lows of 1.0004
and 0.9840, respectively. The greenback is seen finding resistance
around 1.03 against the franc and 0.95 against the euro.
The greenback touched 1.1251 against the pound, its strongest
level since October 21. If the currency rises further, 1.10 is
possibly seen as its next upside target level.
The greenback recovered from its early lows of 0.5838 against
the kiwi, 0.6372 against the aussie and 1.3682 against the loonie,
rising to an 8-day high of 0.5764, 9-day high of 0.6305 and a
10-day high of 1.3772, respectively. The next likely resistance for
the greenback is seen around 0.55 against the kiwi, 0.60 against
the aussie and 1.40 against the loonie.
The greenback edged up to 148.30 against the yen, from an early
low of 147.11. The greenback is likely to find resistance around
the 154.00 level.
Looking ahead, Eurozone jobless rate for September is due in the
European session.
The Bank of England's monetary policy announcement is due at
8:00 am ET. The BoE is widely expected to raise its key rate by 75
basis points to 3 percent from 2.25 percent.
U.S. and Canadian trade data for September, U.S. weekly jobless
claims for the week ended October 29, factory orders for September
and ISM non-manufacturing PMI for October, as well as Canada
building permits for September will be released in the New York
session.
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