Even though investors were betting on aggressive interest rate hikes from the U.S. Federal Reserve meeting, the dollar was down in Asia on Wednesday morning.
The US Dollar Index, which measures the greenback against a basket of other currencies, fell 0.23 percent to 105.27 at 12:27 a.m. ET.(4:27 AM GMT).
The USD/JPY exchange rate fell 0.29 percentage point to 135.09.The pair reached a 24-year low.
The AUD/USD pair advanced 0.48 percent to 0.6900, while the NZD/USD pair advanced 0.21 percent to 0.6226.
The USD/CNY exchange rate fell 0.28 percent to 6.7224, while the GBP/USD rate rose 0.18 percent to 1.2014.
Wednesday’s official data revealed that China’s industrial production climbed 0.7% year-over-year in May, exceeding market expectations. Investing.com had expected a 0.7% loss for April, while the actual number was 2.9% lower. However, the latest COVID-19 breakouts and subsequent restrictions have contributed to concerns about the uncertain recovery path of the world’s second-largest country.
Later in the day, the Fed will announce its policy decisions. The consumer price index (CPI) in the United States increased 8.6 percent year on year in May, the highest increase in forty years, prompting the Federal Reserve to raise interest rates by 75 basis points.
CBA analysts wrote in a morning note that the meeting would have an impact on US interest rates and the USD.
In our opinion, it will take more than a 75bp raise tomorrow or a hint at a 100bp hike for the FOMC’s July meeting to considerably boost the USD after the FOMC meeting.
Investors are currently awaiting policy choices from the world’s central banks. Thursday, the Bank of England will say what its policy will be. The next day, the Bank of Japan will do the same.
The U.S. Producer Price Index (PPI), which was reported on Tuesday, increased 0.8% month-over-month in May.
Bitcoin’s value on the cryptocurrency market steadied at around $22,000.
