Dollar edges up as markets weigh chances of Fed rate hike

TheStar Mon, Jun 05, 2023 05:34pm - 3 months View Original

LONDON: The dollar edged up against major peers on Monday, as markets priced in around a 1-in-4 chance of the U.S. Federal Reserve raising benchmark rates this month after robust jobs data on Friday.

The dollar index - which tracks the greenback against six peers - came off the boil last week, after some Fed officials voiced a preference for a pause in rate hikes and after a breakthrough in U.S. debt ceiling talks calmed market jitters.

Despite a surprisingly high payroll figure for May, indicating the U.S. economy may still be running hot, analysts said the Fed may still have scope to pause rate rises as wage pressures eased and unemployment rose from a 53-year low.

Markets now put the probability of a 25 basis point hike at the meeting on June 13-14 at 27%, down from 2-in-3 odds a week earlier.


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