Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Dollar Steadies as Fed Officials Push Back Against Early Pivot Speculation

Published 06/10/2022, 09:30
Updated 06/10/2022, 09:30
© Reuters

By Geoffrey Smith

Investing.com -- The dollar rose in early trade in Europe on Thursday, after a top Federal Reserve official warned that the U.S. central bank isn't close to ending its cycle of interest rate hikes yet.

By 03:05 ET (07:05 GMT), the dollar index, which tracks the greenback against a basket of six advanced economy currencies, was flat at 110.97, after falling nearly 3% in the last week from what was a 20-year high.

Atlanta Fed President Raphael Bostic said that the U.S. policy tightening cycle is "still in its early days" and warned explicitly against betting on an early 'pivot'.

Despite "glimmers of hope" in recent data, Bostic said "the overarching message I’m drawing...is that we are still decidedly in the inflationary woods, not out of them,"

That warning assumed a greater significance after the Organization of Petroleum Exporting Countries and its allies (chiefly Russia) acted to keep oil prices high by announcing a big cut in their output from next month. High energy prices have been one of the strongest forces driving the global wave of inflation over the last year.

Bostic hasn't been the only Fed official to push back against speculation on a pivot, with San Francisco's Mary Daly making similar comments on two occasions this week alone, despite a big drop in job vacancies that pointed to some cooling off in a red-hot labor market.

More hard data from the labor market are due at 08:30 ET with the release of weekly U.S. jobless claims, but the market will get its marching orders for the next week from Friday's official labor market report on Friday.

On the European crosses, the euro edged higher to 0.9905 after a big upward revision to German manufacturing orders in July, which suggested that the Eurozone economy will continue to enjoy some support from the easing of supply chain bottlenecks, despite its familiar problems with rising energy costs.

The pound also edged up 0.2% to $1.1349, despite what was widely seen as an unconvincing keynote speech by new Prime Minister Liz Truss on Wednesday that left plenty of questions about the sustainability of her fiscal policy unanswered.

The Polish zloty, meanwhile, continued to weaken after the National Bank of Poland surprisingly left its key rate at 6.75% at its monthly meeting on Wednesday, breaking a sequence of 11 straight increases.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.