The U.S. dollar firmed against its major rivals in early European deals on Thursday, as comments by St. Louis Fed President James Bullard cemented expectations that the central bank may raise rates soon, perhaps as early as its meeting in April.
Speaking to Bloomberg Television on Wednesday, Bullard told that inflation is picking up and may overshoot the Fed’s 2 percent target by next year. “We’re in reasonably good shape” with respect to monetary policy but “the odds that we will fall somewhat behind the curve have increased modestly,” Bullard added.
Another strong jobs report could probably make a case for the Fed to move in April, he told.
That followed remarks by Philadelphia Fed President Patrick Harker on Tuesday that upbeat U.S. outlook could help the Fed to consider raising rates as soon as next month, while Chicago Fed president Charles Evans said that “two rate increases is not at all unreasonable”.
Traders await U.S. durable goods orders for February and jobless claims for the week ended March 19 later in the day for more indications about the strength of economy.
The greenback showed mixed performance in Asian deals. While the greenback held steady against the franc and the euro, it was modestly higher against the yen and the pound.
In early European trading, the greenback climbed to 8-day highs of 1.1157 against the euro, 112.97 against the yen and 1.4073 versus the pound, compared to Wednesday’s closing quotes of 1.1179, 112.36 and 1.4114, respectively. The greenback is seen finding resistance around 1.10 against the euro, 114.00 against the yen and 1.39 against the pound.
The greenback rallied to 8-day highs of 0.7478 against the aussie, 0.6672 versus the kiwi and 1.3258 against the loonie, from yesterday’s closing values of 0.7531, 0.6699 and 1.3202,respectively. The next possible resistance for the greenback may be found around 0.735 against the aussie, 0.65 against the kiwi and 1.34 against the loonie.
The greenback that ended Wednesday’s trading at 0.9749 against the franc appreciated to a weekly high of 0.9772. On the upside, the greenback may locate resistance around the 0.985 zone.
Looking ahead, U.K. retail sales and mortgage approvals for February are due shortly.
At 9:45 am ET, Markit’s flash U.S. manufacturing PMI for March is set for release.
The material has been provided by InstaForex Company – www.instaforex.com