Dollar firms on US rate hike prospects
[NEW YORK] The dollar made broad gains on Thursday on prospects of a US interest rate hike this year, while the Greek debt crisis heightened the need for easy money in the eurozone.
The euro fell against the dollar as the Greek parliament approved new austerity measures, opening the way for negotiations on a three-year bailout.
The European Central Bank meanwhile increased its lifeline for Greece's banks, and interim EU financing to keep Athens afloat was expected to be approved Friday.
"All of this uncertainty will require the ECB to maintain super-easy policies for even longer than was the case already," said Kit Juckes of Societe Generale.
The euro fell to US$1.0856, its lowest level against the greenback in seven weeks.
Foreign-exchange market traders had their eyes on the looming interest rate increase in the United States.
Federal Reserve Chair Janet Yellen, in testimony to Congress this week, was upbeat about a potential pick-up in the US economy and reaffirmed the central bank's plan to raise its federal funds rate this year, pegged at zero since 2008 to support the recovery from the Great Recession.
"While US data and US rates have provided no meaningful fresh signal this week, the notion that headline risk from Greece is moving to the background has given traders an opportunity to re-establish positions, including USD long positions," Nomura said in a research note.
AFP
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Banking & Finance
Great Eastern chairman appeals for patience as shareholders fume over share price ‘disaster’
S&P Global first-quarter profit beats estimates on strong product demand
Thai banks cut rate for some borrowers after push from PM
Money laundering accused who faces 22 charges to plead guilty on May 14
BNP Paribas beats estimates as lower costs offset trading slump
Japan brokerage Daiwa’s Q4 profit more than doubles as markets recover