Home Business News US dollar regains some strength against sterling and other majors

US dollar regains some strength against sterling and other majors

by LLB Finance Reporter
5th Jun 23 3:47 pm

The US dollar was recording some strength today as traders’ sentiment improved to a certain extent. The resolution of the US debt ceiling issue has removed a number of concerns and risks and the calmer atmosphere could potentially benefit the dollar.

In addition, the US currency could continue to find support in a possibly tighter monetary policy even while traders expect the Federal Reserve to skip raising rates during their next meeting before potentially returning to new hikes later on.

Denys Peleshok, Head of Asia at CPT Markets said, “Such a direction in monetary policy could put the dollar in a better position against other major currencies.

“In contrast, the euro could see more weakness against the dollar. While the European Central Bank could continue to raise interest rates for some time, gradually reducing the differential with US rates, it could do so in smaller increments.

“This trend could be more visible if inflation levels continue to drop, which could limit how high the ECB could raise rates.
The British pound was also affected by the strength of the US dollar and could potentially drop from its current trading range if current conditions remain in favor of the dollar.

“However, the GBP could find some support later this month if the Bank of England continues to raise interest rates.

“The pound could also react to a certain extent to the construction PMI data publication tomorrow and other real estate-centric data this week. The data releases could fuel some volatility but could leave the currency’s trend without major changes.

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