Dollar ticks higher before Fed rate call

Dollar ticks higher before Fed rate call

US one hundred dollar bills. (REUTERS/Kim Hong-Ji/Illustration/File Photo)
LONDON: The dollar traded close to its 2018 highs on Wednesday (May 2) shortly before a Federal Reserve rates announcement, having overcome an early bout of weakness against its main rivals.As a two-day US central bank meeting was set to wind down, markets expected the Fed to leave its monetary policy unchanged, but rates are widely anticipated to start rising soon, dealers said.The Fed's upcoming statement "will likely be closely scrutinised as the markets try to gauge how many more rate hikes are in the offing this year", brokers Charles Schwab said in a note.Payrolls firm ADP reported on Wednesday that job creation among private companies in the US, although robust, fell short of expectations in April, further strengthening the case for steady rates.Higher US interest rates would make holding dollars more attractive to investors.Eurozone stock markets, meanwhile, closed mostly higher as they caught up after Tuesday's May Day closures, with Frankfurt largely outperforming its peers.
"It has been a good day for European stocks, most notably the German DAX index," said Fawad Razaqzada, a market analyst at Forex.com.Wall Street was soft overall in morning business, but Apple results delighted investors who pushed the phone maker's stock sharply higher."Strong demand for iPhones and a massive share repurchase plan put to bed fears of a disappointing quarter from Apple," said Jasper Lawler, head of research at London Capital Group.Apple reported a hefty jump in second-quarter earnings and unveiled a US$100-billion share buyback plan, while boss Tim Cook said he was optimistic about the outlook.
WATCHING CHINATraders were also keeping tabs on trade developments as a high-level US delegation heads to China this week for talks.The meetings come after US President Donald Trump on Monday decided to extend exemptions for the European Union, Canada and Mexico from steel and aluminium tariffs announced in March.Attention is on also Trump's May 12 deadline for deciding on whether to scrap a nuclear deal with Iran."The Iran sanctions deal issue has not gone away because what the president does about the deal is still a potential flashpoint," said Greg McKenna, an analyst at AxiTrader."My sense is he'll renegotiate or seek to. And I'm not sure that's enough to drive (oil) prices up and through the recent range highs."Oil futures were mixed in late European trading after a strong rise in US inventory and production data.
Key figures around 1540 GMT:London - FTSE 100: UP 0.3 per cent at 7,543.20 points (close)Frankfurt - DAX 30: UP 1.5 per cent at 12,802.25 (close)Paris - CAC 40: UP 0.2 per cent at 5,529.22 (close)EURO STOXX 50: UP 0.5 per cent at 3,556.54New York - Dow: DOWN 0.2 per cent at 24,070.40Tokyo - Nikkei 225: DOWN 0.2 per cent at 22,472.78 (close)Hong Kong - Hang Seng: DOWN 0.3 per cent at 30,723.88 (close)Shanghai - Composite: FLAT at 3,081.18 (close)Euro/dollar: DOWN at US$1.1968 from US$1.1993 at 2100 GMTPound/dollar: DOWN at US$1.3604 from US$1.3617Dollar/yen: UP at 109.92 yen from 109.87Oil - Brent North Sea: DOWN 19 cents at US$72.94 per barrelOil - West Texas Intermediate: UP 19 cents at US$67.44 per barrel
Source: AFP/de
 Source : http://www.channelnewsasia.com/news/business/dollar-ticks-higher-before-fed-rate-call-10196488