On Tuesday, the US dollar traded in a narrow range, as the euro dipped on prospects of more penalties against Russia and the Australian currency benefited from a hawkish central bank.
At 3:00 a.m. ET (0700 GMT), the Dollar Index, which measures the dollar against a basket of six other currencies, was slightly down at 98.955, just below the one-week high of 99.083 set overnight.
As investors wait for the minutes from last month’s Federal Reserve policy meeting to be released on Wednesday, the dollar has changed a lot this week.
Expectations are growing that the central bank will act more forcefully at its May meeting, particularly in light of a jobs report showing that nonfarm payrolls increased by 431,000 jobs last month and the unemployment rate dropped to a fresh two-year low of 3.6 percent.
On Tuesday, at 10:00 AM EST (1400 GMT), the ISM will issue its March non-manufacturing PMI data, which is anticipated to indicate increasing momentum in March, while remarks by Fed officials Neel Kashkari, Lael Brainard, and John Williams will also be widely watched.
At the same time, the AUD/USD exchange rate rose by 0.9 percent to 0.7607, a nine-month high, after the Reserve Bank of Australia kept its benchmark interest rate at 0.1 percent but said that rate rises were coming soon.
Australia’s central bank said in its post-meeting statement that it would not be “patient” with policy changes, which is a word that has been in every post-meeting statement since November 2021. This implies that the policy rate will rise soon.
The EUR/USD remained virtually constant at 1.0972, just above a one-week low, amid rumours of more penalties against Moscow in response to alleged Russian crimes against residents in the Ukrainian town of Bucha.
Scholz said that Putin and his followers will have to deal with the consequences of the Bucha massacre. Biden’s national security adviser, Jake Sullivan, said that this week, the United States would announce more sanctions against Moscow.
In a report, ING analysts said that “it seems that the EU is still some distance away from weaning itself from Russian oil,” “Presumably, any move by the EU toward a Russian oil embargo would result in another increase in crude prices and a weakening of the euro.”
USD/JPY fell 0.2 percent to 122.58 after Bank of Japan Governor Haruhiko Kuroda said that the recent rise in the value of the Japanese yen has been “very quick.” Officials are paying close attention to developments.
This is what happened on the day that Turkey’s inflation hit a 20-year high in March. Consumer prices rose 61.1 percent on an annual basis through last month, and the GBP/USD rose 0.1 percent to 1.3133. The USD/TRY rose 0.1 percent to 14.7092.