The dollar fell Thursday, June 8, despite getting some support from the rise in US Treasury yields, while traders are evaluating the possibility of the US Federal Reserve raising interest rates again, even if it refrains from doing so next week.
Expectations are increasingly indicating that US and global interest rates may rise further, after the Bank of Canada and the Reserve Bank of Australia made sudden interest rate increases this week.
On Wednesday, the Bank of Canada raised its overnight interest rate to a 22-year high of 4.75% after a four-month hiatus, while the Reserve Bank of Australia on Tuesday raised interest rates by a quarter point to an 11-year high, warning of further hikes. the future.
The Canadian dollar settled in the latest transactions at 1.3365 per dollar, after rising to the highest level in a month at 1.3321 per dollar in the previous session.
Edward Moya, chief market analyst at OANDA, said the Bank of Canada indicated that more interest rate hikes could happen and this has prompted everyone to reconsider that the Federal Reserve will pause after the rate hike in July.
The US dollar fell broadly in early Asian trading, the British pound rose 0.08% to $1.2449, and the euro rose 0.08% to $1.0707.
Against the yen, the dollar fell 0.21% to 139.85, with the Japanese currency receiving support from data that showed today, Thursday, that the country's economy grew by 2.7% on an annual basis during the first quarter, which is much higher than an initial estimate that indicated a growth of 1.6%.
The dollar index fell slightly to 104.02, but it was not far from the two-month high it reached last week, with Treasury yields rising.
The 10-year Treasury yield came in at 3.7914%, after rising nearly 10 basis points to peak at 3.801% on Wednesday.
Financial markets are forecasting a 29% chance that the US Federal Reserve will raise interest rates by 25 basis points at next week's policy meeting.
The offshore Chinese yuan held near its lowest level in more than six months at 7.1469 per dollar, after falling to 7.1527 in the previous session, its lowest level since late November.
Data released on Wednesday showed China's exports fell much faster than expected in May while imports continued to decline, casting doubts over the country's fragile economic recovery.
The Australian dollar rose 0.18% to $0.6665, after falling nearly 0.3% in the previous session, while its New Zealand counterpart rose 0.22% to $0.6050, compensating for some of the 0.7% decline it recorded yesterday, Wednesday.
The Turkish lira fell to a record low of 23.39 per dollar.
