Today on Monday (June 27), the US dollar and euro opened at 0.9470 and closed at 0.9471 yesterday. As of now, the highest has touched 0.9477 and the lowest has been 0.9455. Temporarily reported 0.9465, down 0.06%. The euro and the dollar were temporarily reported at 1.0559, an increase of 0.09%; the dollar and the Canadian dollar were temporarily reported at 1.2902, an increase of 0.06%.
In early Asian trading on June 27, the U.S. dollar index was trading around 104.10, as traders scaled back bets on a possible peak in interest rates and advanced expectations for the timing of interest rate cuts in response to a possible recession. U.S. federal funds futures priced in on Friday, with a 73 percent chance of a 75-basis-point rate hike at the July meeting .
The greenback, which is up about 9 percent this year, has lost some of its shine since investors began betting that the Federal Reserve could slow the pace of tightening after another 75 basis point hike in interest rates in July. They now see rates peaking at around 3.5% in March next year and falling by nearly 20 basis points by July 2023. But Fed Chairman Jerome Powell said on Thursday that the central bank’s commitment to reining in the highest inflation in 40 years was “unconditional”, even as he acknowledged that sharp interest rate hikes could push up unemployment. And Governor Bowman last Thursday called for a more aggressive path of rate hikes than most of her peers are currently considering, saying she wants to keep raising rates until they beat short-term inflation expectations.
U.S. federal funds rate futures were priced on Friday, and the probability of the Fed raising interest rates by 75 basis points at the July meeting was 73%. The market has fully priced in the expectation of only a 50 basis point rate hike in August.
Talk of a peak in Fed hawkishness weighed on the dollar, while traders began to expect no further rate action from the Fed after its December meeting.
The euro edged lower against the dollar on Friday before turning higher, rising as much as 0.5% to 1.0571 during the session, before closing up 0.32% at 1.0553. The pair gained 0.5% last week, heading for its first weekly gain this month. Traders’ bets on the ECB’s rate hike by the end of the year fell below 150 basis points for the first time in two weeks on Friday. European Central Bank President Christine Lagarde said on June 20 that the current economic activities in the euro zone are affected by many adverse factors such as high energy costs, deteriorating terms of trade, and the impact of high inflation on residents’ disposable income, and face greater uncertainty.