Dollar firm after Fed comments; yen under close watch – TradingView

The dollar weakened against major currencies on Thursday as Federal Reserve officials said they were in no hurry to cut interest rates amid low inflation and traders braced for key economic data. Rose.

Meanwhile, the yen is holding steady against the dollar after Japanese financial officials indicated on Wednesday that they were prepared to intervene, although the currency is still far from the 152 yen mark.

Federal Reserve Chairman Christopher Waller, speaking late in US trading on Wednesday, said recent disappointing inflation data supported the case for the US central bank to hold off on lowering its short-term interest rate target.

In a speech prepared ahead of a New York Economic Club meeting, Waller said there was “no need to rush to lower interest rates” at this point.

dollar index DXY, the dollar’s benchmark against the country’s main currency rose following Waller’s comments and ended unchanged at 104.41. It is expected to rise by about 3% by 2024.

According to the CME FedWatch tool, market expectations for a first rate cut at the June Fed meeting have eased slightly, with the probability now at 60%, compared to 67% this time last week. It’s incorporated.

Kyle Rodda, senior financial markets analyst at Capital.com, said Waller’s speech was “a sign that the Fed is becoming more wary of a persistence in inflation or even a reacceleration of price increases.” Stated.

While the central bank has signaled it is willing to overcome some of the bumps in the road, Rodda believes the rationale for rate cuts is weakening on balance.

“A solid reading on inflation tomorrow could raise questions about whether markets are justified in pricing in three rate cuts in 2024,” he said, adding that this would be positive for the dollar.

Traders are looking ahead to key US core inflation data to be released on Friday, with the dollar already strengthening against the yen following a bigger-than-expected rise in US durable goods orders on Tuesday. waiting.

The dollar reached 151.975 yen US dollar yen On Wednesday, it hit its highest against the yen since the mid-1990s.

The yen rose slightly after Japanese authorities held a meeting on Wednesday on currency depreciation, with top foreign exchange diplomat Masato Kanda saying: “We will not rule out any measures to address disorderly movements in the currency.” .

Finance Minister Shunichi Suzuki said on the same day that authorities may take “decisive measures,” a phrase Japan has not used since its last intervention in 2022.

As a result, markets are wary of any signs that authorities are backing up their words with action.

“No one would pay 152.01 yen to the dollar today because of this risk,” Ray Attrill, head of currency strategy at National Australia Bank, said in a note.

“But if there is no intervention by the end of the week, I highly doubt someone will intervene next week.”

Japan intervened in the foreign exchange market three times in 2022, first in September and then in October, when the yen fell toward a 32-year low of 152 yen to the dollar, selling dollars and trading yen for yen. bought.

Japan’s currency was last pegged at 151.37 against the dollar.

Meanwhile, a summary of opinions from the Bank of Japan’s March meeting released on Thursday showed policymakers are divided on whether the economy is strong enough to handle an exit from ultra-easy monetary policy.

elsewhere euro euro dollar It fell 0.11% to £1.0814. pound dollar It fell 0.17% to $1.2616.

Bitcoin in cryptocurrency BTCUSD It last traded up 1.14% at $69,648.86.