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US Dollar May Rise as Fed Commentary Boosts Rate Hike Outlook

US Dollar May Rise as Fed Commentary Boosts Rate Hike Outlook

Ilya Spivak,

Talking Points:

  • Quiet European data docket puts the spotlight on Fed commentary
  • US Dollar may rise as Williams, Yellen boost rate hike speculation
  • NZ Dollar outperformed in Asia after demand rose at bill auction

Comments from Federal Reserve officials are in the spotlight as the spectrum of global financial markets return from Easter holiday closures. Remarks from San Francisco Fed President John Williams are first to cross the wires, followed by a much-anticipated speech from Chair Janet Yellen.

We’ve argued that Fed policymakers’ tone following the March FOMC meeting has been aimed at realigning official and market-based policy bets to set the stage for a smooth rate hike in June. Rhetoric stressing domestic progress toward the central bank’s unemployment and inflation objectives while blaming external forces for the pause in the normalization cycle would amount to more of the same. This may boost priced-in tightening expectations, encouraging the US Dollar higher.

The New Zealand Dollar outperformed in otherwise quiet overnight trade. The move higher tracked local bond prices following an auction of 3-, 6-, and 12-month bills to suggest a pickup in demand for NZD-denominated paper. Indeed, bid-to-cover ratios reflected better uptake this time around versus the latest time similar-maturity debt was on offer two weeks ago.

Are markets matching DailyFX analysts’ expectations so far in 2016? Find out here !

Asia Session

23:30JPYJobless Rate (FEB)3.3%3.2%3.2%
23:30JPYJob-To-Applicant Ratio (FEB)
23:30JPYOverall Household Spending (YoY) (FEB)1.2%-1.9%-3.1%
23:50JPYRetail Trade (YoY) (FEB)0.5%1.6%-0.2%
23:50JPYRetail Sales (MoM) (FEB)-2.3%-0.9%-0.4%
23:50JPYDept. Store, Supermarket Sales (FEB)2.2%1.6%0.9%
05:00JPYSmall Business Confidence (MAR)48.849.047.9

European Session

-CHFTotal Sight Deposits (MAR 25)-482.5bLow
-CHFDomestic Sight Deposits (MAR 25)-418.4bLow
08:00EUREurozone M3 Money Supply (YoY) (FEB)5.0%5.0%Medium
09:15USDFed's Williams Speaks in Singapore --Medium
10:00GBPBOE's FPC Publishes Statement --Medium

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3

--- Written by Ilya Spivak, Currency Strategist for

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.