USD rose on Wednesday against a basket of global currencies to maintain its gains for the second day in a row, supported by the rise in 10 years US bond yields. This comes ahead of the release of new jobs data in the united states private sector and other data on the manufacturing sector, Federal Reserve at the end of its regular meeting yesterday to discuss monetary policies appropriate to developments in the growth of the world’s largest economy.
Dollar index rose more than 0.1% at 11:45 GMT, trading at 94.54 points, the opening level of 94.42 points, the highest at 94.60 and the lowest at 94.39.
The index ended yesterday’s trading up 0.1%, its third gain in four days, boosted by rising bond yields in the united states and strong data support that showed a higher-than-expected rise in consumer confidence in the united states economy in October.
Over the month of October, the dollar index gained 1.7%, the second monthly gain, in a row, supported by a strong rise in a long term and short term US bond yields, with strong prospects for the Fed raising interest rates for a third time during the January meeting. In December, and in support of the hopes of the success of the united states President Donald Trump’s administration in introducing broad tax reforms to boost the country’s economic growth.
united states 10 years bond yields rose 2 basis points to 2.39%, extending for a second straight day, after rising 2 basis points on Tuesday after strong economic data.
Investors are looking forward to a busy day of economic data and important decisions in the united states, which will have a major impact on the direction of the world’s largest currency exchange rate in the next trading session against most of the world’s currencies.
By 12:15 GMT, private sector jobs are forecast at 202,000 in October from 135,000 in September.
On the manufacturing sector, the final reading of the Industrial Purchasing Managers Index (PMI) for the month of October is expected with the same preliminary reading of 54.5 points and the Industrial Supply Institute index expected to reach 59.5 points in October from 60.8 points in September.
The Federal Reserve’s Monetary Policy Committee FOMC concludes its weekly meeting yesterday to discuss appropriate monetary policies for the united states economy’s growth path.
Most market expectations show interest rates unchanged at 1.25%, especially since most of the odds are currently raising the third-time interest rates this year at the next meeting in December.
The monetary policy committee noted at the September meeting that it was still expecting another interest rate hike by the end of the year, despite the country’s low inflation levels.
In the same context, the united states President Donald Trump is due to announce Thursday the election of the new president of the Federal Reserve. According to the latest news from the White House, Trump will announce the selection of a new Governor of the Central Bank, Jerome Powell, to succeed Janet Yellin, February 2018.
Jerome Powell, a reserve member, is now seen as more cautious about tightening monetary policy than other contenders, especially with economics professor John Taylor, who is now the top contender for the post with Powell.