The dollar struggled for direction yesterday. The currency remained in ‘slim’ ranges as markets waited on ‘fresh’ signals on whether the Federal Reserve probably keep raising interest rates. Recent news reports closely watched Congress to find out if they reach an agreement to raise the U.S. debt ceiling.
To attempt and reach an agreement on a plan to raise the more than $31 trillion debt ceiling U.S. President Joe Biden and Republican House Speaker Kevin McCarthy are scheduled to meet later this session.
The market has been under pressure recently due to worries that if a deal cannot be reached, the United States could default on its debt commitments, possibly sending the world economy into recession.
The American Treasury has issued a warning that the deadline for the government to run out of cash to pay its payments is June 1.
The greenback had a positive trade in the past two weeks as stronger-than-expected economic reports and hawkish Fed officials keep the prospect of further interest rate increases alive.
The dollar index settled at 103.23, up 0.03%, while USD INR settled at 82.8080, down 0.03%.
Bullions settled with a minor loss. Gold prices settled at 60241, down 0.23%. Silver settled at 72733, down by 0.80%.
Copper retreated from the day’s high and settled at 717.40, down by 0.93%., Zinc was down by 1.80%, settled at 221.20. Aluminium prices are down by 0.62% at 0.62%.
Crude Oil prices were able to gain 2.30% amid supply concerns. The latest data from Baker Hughes showed the U.S. oil rig count fell by 11 over the last week to its lowest count since June 2022.
Brent crude futures were down by 0.11% to $75.91 a barrel. U.S. West Texas Intermediate crude was at $71.99 a barrel, up 0.19%. MCX crude oil rose by 2.30% and settled at 6017.
Economic data and events to watch
Japan
At 10.30 am – BOJ Core CPI y/y. Data foresaw 2.8% lower from 2.9%.
Above data could have a negative impact on the yen.
Eurozone
At 12.45 am – French Flash Manufacturing PMI is to be released. Data is foreseen at 46.1, lower than 45.6.
French Flash Services PMI, data is foreseen at 54.00 slightly lower from the previous 54.6.
At 1.00 pm – German Flash Manufacturing PMI to be released. Data is foreseen at 44.9 slightly higher from 44.5.
German Flash Services PMI, data is foreseen at 55.00 lower from the previous 56.00.
At 1.30 pm – Flash Manufacturing PMI to be released. Data is foreseen at 45.9 from 45.8.
Flash Services PMI to be released. Data is foreseen at 55.4 lower than 56.2.
Current Account at the same will have a strong impact on the Euro. Data is foreseen at 20.2B lower than the previous 24.3B.
All the above data may have a mixed impact on the Euro.
U.K.
At 2.00 pm – Flash Manufacturing PMI to be released. Data is foreseen at 47.9 slightly higher from the previous 47.8.
Flash Services PMI, data is foreseen at 55.5 slightly lower from the previous 55.9.
The above data is expected to have a volatile impact on Pound.
Canada
At 6.00 pm- IPPI m/m is to be released. Data is foreseen at 0.2% from 0.1%.
RMPI m/m, data are foreseen at 0.7% compared to a contraction of -1.7%.
The above data is expected to have a negative impact on the dollar.
US
At 7.15 pm- Flash Manufacturing PMI data is foreseen at 50.0 slightly lower from the previous 50.2.
Flash Services PMI data is foreseen at 52.6 slightly lower from the previous 53.6.
At 7.30 pm – New Home Sales data is foreseen at 665K slightly lower from 683K.
Above data could have a negative impact on the dollar.