By Gina Lee
Investing.com – The dollar was down on Wednesday morning in Asia despite climbing to multi-year highs. Investors now await U.S. inflation data due on Thursday for clues of the U.S. Federal Reserve’s timeline on interest rate hikes.
The that tracks the greenback against a basket of other currencies edged down 0.16% to 95.490 by 10:42 PM ET (3:42 AM GMT).
The jumped to as high as 1.97% on Tuesday, not seen since Nov.2019.
The pair edged down 0.14% to 115.38.
The pair jumped 0.24% to 0.7162 and the pair edged up 0.17% to 0.6659.
The pair inched down 0.08% to 6.3614 and the pair edged up 0.17% to 1.3564. Chinese state-backed funds stepped into the stock market to buy local stocks Tuesday afternoon after the biggest intraday drop of the benchmark index since August 2021.
European Central Bank’s president Christine Lagarde said on Monday that there is no need for extensive tightening, tapping down rising expectations of aggressive interest rate hikes.
The euro jumped 2.7% during the previous week after Lagarde opened the door a crack to a potential interest rate hike in the same week.
The is “in a holding pattern while markets weigh up the prospect of an abrupt Fed policy tightening against the ECB’s hawkish backflip,” Westpac analysts wrote in a client note.
Although a more hawkish ECB might cap dollar gains near-term, the dollar’s “medium-term bull trend is still intact,” and the dollar index is a buy on dips to the low 95 level, the notes added.
Investors now await U.S. inflation data, including the , due on Thursday for more clues on the timeline of the interest rate hikes.
Investors are betting on more than a 70% chance of a 25 basis point hike and a near 25 basis point hike and a nearly 30% chance for a 50 basis point hike when U.S. policymakers meet in March, according to CME’s FedWatch Tool.
San Francisco Fed President Mary Daly said on Tuesday that U.S. inflation might even go higher before getting better.
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Read More: Dollar Down as Investors Await U.S. Inflation Data By Investing.com