The dollar opened higherup to date, after a Federal Reserve official tempered expectations for US interest rate cuts.
The currency opened on Wednesday at an average of $4.025, placing $31.34 below that of the Representative Market Rate, which for today was at $4.093.66. The currency hit a high of $4,140 and lows of $4,125. 16 movements were made for an amount of US$5.5 million.
According to Bloomberg, these behaviors occurred after Fed Governor Michelle Bowman reiterated her opinion that Borrowing costs should remain elevated for some time. The 10-year Treasury yield rose and a dollar indicator rose for a second day.
Fed officials recently forecast just 25 basis points of reductions by the end of this year and a total of 125 basis points by the end of 2025.while market participants are pricing in around 75 basis points for the first quarter of 2025.
But some are starting to guard against deeper and faster easing: positioning in the rate options market shows an increase in bets being will benefit if the Federal Reserve cuts its key rate to just 2.25% over the next nine months – a whopping three percentage points of cuts.
Crude oil prices rose on Wednesday, according to Reorters, approaching almost two-month highs, driven by forecasts of an eventual reduction in inventories during the peak demand season summer of the third quarter and the geopolitical risks derived from the conflict in the Middle East.
The American Petroleum Institute, API, reported on Tuesday that crude oil inventories in the United States increased by 914,000 barrels, according to market sources. Still, analysts expect them to decline by almost three million barrels in official inventory data due later in the day.
“The general opinion is that demand will increase during the summer (boreal)“Tamas Varga of brokerage PVM told Reuters. “Geopolitics is still considered a supporting element of the equation.”
