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NEW YORK (Reuters) – The dollar weakened on Tuesday after data showed U.S. durable goods orders rose above expectations in January, while Japan’s core consumer inflation beat expectations. The yen fell.
Data out of Japan the next day sustained some hopes that the Bank of Japan would end negative interest rates by April.
Orders for durable goods (products ranging from toasters to aircraft that last more than three years) fell 6.1% last month, according to the U.S. Department of Commerce’s Census Bureau, exceeding the 4.5% decline expected by economists polled by Reuters. Ta.
As the U.S. economy continues to perform well and inflationary pressures persist, markets have recently eased expectations about the timing and size of the Federal Reserve’s interest rate cuts this year.
The dollar fell 0.1% against the yen to 150.56, while the dollar index against a basket of currencies rose 0.08% to 103.86.
“Japan’s inflation rate has been trending down slightly in recent months, but today’s numbers suggest inflation is sticking in Japan,” said Sean Osborne, chief currency strategist at Scotiabank in Toronto. ” he said.
“That will likely mean a series of modest rate hikes in Japan in the coming months.”
Bitcoin hit a two-year high on signs that major corporations are buying the cryptocurrency.
Bitcoin was last up 5.22% at $57,513 and Ether was up 2.26% at $3,258.
In other US economic news, consumer confidence fell more than expected this month to 106.7 from January’s downwardly revised 110.9.
The US core personal consumption expenditure (PCE) price index, released on Thursday, is expected to be one of the most important reports for markets this week. The forecast was for a rise of 0.4%.
“We’re waiting for the PCE data to perhaps give us a stronger direction,” Osborne said. “I think we’re prepared to expect a slightly stronger number. It would probably take a big upside surprise for the dollar to really move higher at this point.”
The euro last fell 0.1% against the dollar. It has been rising since hitting its lowest since November 14 in mid-February.
Analysts said the market had trimmed bets on a future rate cut by the European Central Bank (ECB) to 90 basis points by year-end, following positive signals from the economy that supported expectations for faster growth in the second half of 2024. He said the currency had appreciated.
German states, France and Spain will release inflation figures on Thursday ahead of euro zone figures on Friday.
ECB officials are becoming more cautious about rapid monetary easing, with President Christine Lagarde saying wage growth remains strong, while ECB dovish Yanis Stournaras has warned against interest rate cuts before June. denied the possibility.
The dollar rose 0.06% against the offshore Chinese yuan to 7.214 yuan. The People’s Bank of China has set the median exchange rate at which the yuan can be traded within a 2% range at 7.1057 yuan to the dollar.
The kiwi fell 0.06% against the dollar to $0.617 as traders braced for what could be a key policy meeting by the Reserve Bank of New Zealand (RBNZ) on Wednesday.
Markets are pricing in a 1 in 3 chance that the RBNZ will raise the official cash rate by 5.5% to combat stubborn inflation.
(Additional reporting by Stefano Rebaudo; Additional reporting by Kevin Buckland; Editing by Sharon Singleton, Chizu Nomiyama, Angus MacSwan, David Gregorio)
