Market News

The U.S. currency traded in narrow ranges on Tuesday against major currencies as investors’ expectations that the Federal Reserve Bank will hike interest rates soon started to wane. It appears that the recent weak U.S. economic data is influencing the Fed’s decisions to hike interest rates. Many analysts believe that the market has to scale back its expectations of any aggressive interest rate hike by the Fed in the months ahead.

The U.S. Dollar fell against the Euro in mid-afternoon trading in Asia because investors are speculating that the European Central Bank will increase its key interest rate next month, the first increase in a year. The market is anticipating that the ECB will hike its interest rate by 25 basis points or more, following comments made by ECB president, Jean-Claude Trichet, since July, to curb rising inflationary pressures in the Euro zone.

The U.S. Dollar fell against the Euro in mid-afternoon trading in Asia because investors are speculating that the European Central Bank will increase its key interest rate next month, the first increase in a year. The market is anticipating that the ECB will hike its interest rate by 25 basis points or more, following comments made by ECB president, Jean-Claude Trichet, since July, to curb rising inflationary pressures in the Euro zone.

In mid-morning trading in Sydney, the U.S. Dollar dropped slightly ahead of today’s release of the U.S. Consumer Price Index data for May. According to experts, the Consumer Price Index data will confirm foreign exchange traders’ view that interest rates will be hiked by the Federal Reserve before the year end.

The U.S. Dollar weakened against major currencies on Thursday in mid-morning trading in Sydney as traders reacted to a sharp decline on Wall Street on renewed worries about the U.S. economy and the rising oil prices.

Late on Monday, the Chairman of the Federal Reserve system, Ben Bernanke, signaled that it is very likely that U.S. interest rates will be hiked soon, to combat inflation. As a result of these comments, the U.S. currency gained against major currencies on Tuesday trading. In early morning trading on Wednesday in Sydney, the U.S. currency consolidated its gains against major currencies.

The U.S. Dollar rose sharply in late morning trading in Sydney following positive comments about the U.S. economy, made by Ben Bernanke, chairman of the Federal Reserve Bank. His comments confirmed investors’ views that the Federal Reserve has ome to the end of its interest rate cutting exercise and would likely start hiking interest rates soon in an effort to cut inflation.

The U.S. Dollar gained against the Japanese Yen in early Monday morning trading in Tokyo, because of strong demand from Japanese importers and short-term traders who are worried about the surging cost of materials, including crude oil.

The U.S. Dollar maintained its steady rise against major currencies, as investors expect the Federal Reserve to hike interest rates by the year’s end to curb inflationary pressures on the economy. Ben Bernanke, the Federal Reserve president, continues to express his concerns about inflationary pressures on the economy, and on Tuesday, he cautioned about the effect of inflation on the weak U.S. Dollar.

The U.S. Dollar remained steady in afternoon trading on Wednesday in Asia against the Euro and the Yen, ahead of U.S. economic data and press release by the European Central Bank on interest rates.

The U.S. Dollar fell marginally lower against major currencies in early morning trading in Sydney on Tuesday. The currency remains under pressure as it fell to its lowest level against the Yen in nine weeks in New York because of concerns of the impact of the liquidity crisis has resurfaced.

Investors are waiting for several U.S. economic data to be released this week and speeches by the President of the European Central Bank and the Federal Reserve Bank. As a result, the U.S. Dollar traded slightly lower against major currencies in early morning trading in Sydney. On June 2, 2008, at 11:00 am (01:00 GMT), the U.S. Dollar traded at 105.27 Yen, compared to 105.50 Yen, while the Euro traded at $1.5557, compared to $1.5552 in late Friday trading in New York.

In afternoon trading in Tokyo, the U.S. Dollar gained against major currencies because of better than expected durable goods data that reduced worries about the state of the U.S. economy. On May 28, 2008, at 01:00 pm (04:00 GMT), in Sydney, the U.S. Dollar traded at 104.84 Yen, compared to 104.74 Yen, while the Euro traded at $1.5634, compared to $1.5654 in late trading in New York.

The U.S. Dollar fell slightly in morning trading in Sydney because of the public holidays on Monday in the United States and the United Kingdom, coupled with the negative effect of high oil prices on the U.S. currency.

Data for existing home sales for April will be announced today by the National Association of Realtors in Washington, D.C., and experts are predicting that the data will show that the housing sector is still weak. This data will be released two days after the Federal Reserve reduced its growth forecast for 2008 and increased its estimates for inflation for the current year. It appears that, except the housing data, analysts do not see any additional data that will affect the currency market today.