Dollar remains steady following interest rate speculation

Published: 25 Mar at 5 AM Tags: Euro, Dollar,

It appears that the recent sell-off of the US dollar has come to an end as the greenback finds firmer footing. Following a one-month low of 119.22 yen the dollar has recovered to trade at 119.73 but may still struggle to breach the 120 yen mark.

The euro has retreated from $1.10295 to $1.0915. The single currency has suffered from better than anticipated CPI figures.

The dollar is also doing well against the major commodity currencies. The Australian dollar has slipped back from a two-month high of $0.7939 to below 79 cents. Last week the dollar fell back from multi-year peaks because a Federal Reserve announcement suggested that an interest rate hike would be gentler than originally expected.

It is still likely that the US central bank will hike interest rates at some point this year. More will be gleaned after the head of the Chicago Fed speaks later and data on US durable goods is released.

Analysts are also waiting for Australia’s central bank to publish its report on how the country’s banking sector is faring. Although US Treasuries are down it is likely that the US dollar will continue to be the dominant force in the forex market.