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U.S. dollar rises as more investors expect Fed hike in May

NEW YORK
2023-04-18 05:20

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NEW YORK, April 17 (Xinhua) -- The U.S. dollar continued to rebound in late trading on Monday after the release of U.S. economic data and more investors think the Fed will raise interest rate by 25 basis points in May.

The dollar index, which measures the greenback against six major peers, was up 0.48 percent at 102.1082 in late trading.

In late New York trading, the euro was down to 1.0926 dollars from 1.0999 dollars in the previous session, and the British pound fell to 1.2373 dollars from 1.2414 U.S. dollars in the previous session.

The U.S. dollar bought 134.3900 Japanese yen, higher than 133.79 Japanese yen of the previous session. The U.S. dollar was up to 0.8988 Swiss francs from 0.8939 Swiss francs, and it rose to 1.3397 Canadian dollars from 1.3360 Canadian dollars. The U.S. dollar increased to 10.3568 Swedish Krona from 10.3245 Swedish Krona.

The Federal Reserve Bank of New York reported Monday that the empire state manufacturing index was 10.8 in April, up from -24.6 in March, which shows the biggest monthly increase in a year. Economists had expected a -18.3 reading.

The National Association of Home Builders (NAHB) reported Monday that the housing market index was 45 in April, up from 44 in March. It's in line with economists' expectations.

U.S. Treasury yields continued to rise on Monday, with the 2-year note rate moving toward 4.2 percent handle and the 10-year bond rate moving toward 3.6 percent.

The Fed has nearly 90 percent probability to raise the benchmark interest rate by 25 basis points in early May, up from 78 percent probability last Friday, according to data from the CME FedWatch Tool on Monday afternoon.

"There is a tug of war between those who are feeling optimistic that the Fed will soon be ending the rate tightening program because of softness that we're seeing in the economy ... with those who believe the Fed will be forced to raise rates longer because the economy is not in a sense, surrendering," Sam Stovall, chief investment strategist at CFRA Research, said on Monday.
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