Forex

Dollar hovers near two-year high, US GDP awaited

Reuters Tokyo | Updated on April 26, 2019 Published on April 26, 2019

The dollar index versus a basket of six major currencies stood at 98.128 after advancing to 98.322 on Thursday, its highest since May 2017. File photo

The dollar was down 0.1 per cent at 111.52 yen after shedding 0.5 per cent overnight

The dollar hovered near a two-year high against its peers on Friday, supported by strong United States (US) capital goods orders and awaiting the first-quarter’s gross domestic product (GDP) data which could further reinforce the greenback's bullish standing.

The dollar index versus a basket of six major currencies stood at 98.128 after advancing to 98.322 on Thursday, its highest since May 2017.

Data on Thursday showed new orders for US-made capital goods increased by the most in eight months in March. That follows other recent US data that show strength in retail sales and exports which have eased concerns of the world's biggest economy sharply slowing.

According to a survey, the GDP probably increased at a 2.0 per cent annualized rate in the quarter. The economy grew at a 2.2 per cent pace in the October-December period.

“We expect the GDP data to underline steady economic recovery. Differences in economic fundamentals is a key driver for currencies now that the Fed - and more recently the Swedish and Japanese central banks - have adopted a dovish stance,” said Shin Kadota, senior strategist at Barclays in Tokyo.

Sweden's central bank said on Thursday that recent weak inflationary pressures meant an interest rate hike would come slightly later than it had planned, sending the Swedish crown to a 17-year low.

In a move to dispel any doubt over its commitment to ultra-loose policies, the Bank of Japan (BOJ) on Thursday put a time frame on its forward guidance for the first time by telling investors that it would keep interest rates at super-low levels for at least one more year.

The euro was a touch higher at $1.1139 but within reach of $1.1117, its lowest level since June 2017 plumbed on Thursday.

The single currency has shed nearly 1 percent against the dollar this week, weighed by worries about the health of the euro zone economy.

The dollar was down 0.1 per cent at 111.52 yen after shedding 0.5 per cent overnight.

The Australian dollar was steady at $0.7018 after ending Thursday little changed.

The Aussie has lost roughly 2 per cent this week, during which it sank to a near four-month trough as soft domestic inflation data boosted the prospect of a rate cut by the Reserve Bank of Australia.

Published on April 26, 2019
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