Dollar firms on lin­ger­ing hopes for June rate hike in­spired by Fed min­utes

The China Post - - MARKETS -

The dollar firmed Thurs­day af­ter the min­utes of the Fed­eral Re­serve’s last pol­icy meet­ing showed a split over the tim­ing of an in­ter­est-rate in­crease, keep­ing chances of a June hike alive.

The dollar bought 120.28 yen in Tokyo af­ter­noon trade, up from 120.14 yen in New York late Wed­nes­day.

Ac­cord­ing to the min­utes of the March 17-18 meet­ing of the Fed­eral Open Mar­ket Com­mit­tee, “sev­eral par­tic­i­pants” thought con­di­tions were right for a June hike in the fed­eral funds rate, which has been stuck near zero since late 2008.

Oth­ers deemed the econ­omy would not be able to weather a rise un­til later in the year, while “a cou­ple” said liftoff would re­main un­likely un­til 2016.

Dif­fer­ences of views within the Fed coun­tered an ear­lier mar­ket con­vic­tion that a June hike was now off the ta­ble.

“The FOMC min­utes show there were a few sup­port­ers for a June rate hike,” said Nao­hiro No­moto, an as­so­ciate for cur­rency trad­ing at Bank of Tokyo-Mit­subishi UFJ in New York.

“There seems to be se­ri­ous talk of a June in­crease, so there was some dollar buy­ing amid the hawk­ish tone,” he told Bloomberg News.

Na­tional Australia Bank said mar­kets were none the wiser on the tim­ing for the US rate rise.

“In short, there’s a wide di­ver­gence of views within the Fed, no con­sen­sus on lift-off tim­ing,” it said in a note.

“The fi­nal ar­biter will be the data, re­cent data ar­gued for de­layed rate lift-off. A June 18 rate lift-off is now be­ing priced as quite a slim chance,” it said.

The euro bought US$1.0764 and 129.40 yen against US$1.0780 and 129.52 yen in U.S. trade, af­ter data from the eu­ro­zone’s big­gest econ­omy Ger­many showed fac­tory or­ders fell again in Fe­bru­ary.

The dollar was mixed against other Asia-Pa­cific cur­ren­cies.

It de­clined to SG$1.3561 from SG$ 1.3564 on Wed­nes­day, to 62.24 In­dian ru­pees from 62.30 ru­pees and to 12,917.50 In­done­sian ru­piah from 12,972.50 ru­piah.

It rose to 1,092.15 South Korean won from 1,090.97 won while re­main­ing un­changed at 44.47 Philip­pine pe­sos and 32.54 Thai baht.

The Aus­tralian dollar bought 76.89 U.S. cents, down from 76.96 cents, while the Chi­nese yuan was 19.39 yen, up from 19.34 yen.

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