© Reuters.
By Peter Nurse
Investing.com – The dollar gains early in Europe on Friday, looking set to post its first weekly gain in more than a month on rising expectations that the Federal Reserve will further tighten monetary policy next month.
By 09:05 AM ET (0905 GMT), the , which tracks the currency against a basket of six other major currencies, was up 0.1% at 101.720, and on track for a weekly gain of around 0. .3%, after five consecutive weeks of losses.
Statements from several Federal Reserve policymakers this week suggest the US central bank will raise rates by 25 basis points in early May, believing inflation remains problematic and monetary policy needs to tighten further.
That said, this could be the last hike in the cycle, as economic data points to a slowdown in the US economy and money markets anticipate rate cuts as early as July and through the end of the year.
Today the preliminary figures for April will also be released, which will shed a little more clarity on the general economic situation of the largest economy in the world.
The pair falls 0.2% to the level of 1.0947, awaiting the publication of the manufacturing PMI and the services of several countries in the euro zone.
Although surveys on the manufacturing sector place it in contraction territory, the services sector is expected to remain robust, which would increase inflationary pressure.
The European Central Bank’s monetary policy “still has some way to go” to bring inflation back to its 2% target, ECB President Christine Lagarde said on Thursday, hinting that more is to come.
“The ECB news is slightly supportive of the euro, but the international environment is not yet in favor of a big push above 1.10 for the EUR/USD pair,” ING (AS:) analysts say in a note.
The pair is down 0.3% to the 1.2403 level, after UK prices fell 0.9% more than expected in March compared to February, as British consumers have been affected by the high rate of March that remained in two figures.
On the other hand, the pair fell 0.8% to the level of 0.6688, the left 0.3% to 133.88, with limited losses after learning that they grew more than expected in March, while which registered them at a slower rate than expected.
The pair is set to rise 0.3% to the 6.8948 level as the yuan has been weighed down after reports that China’s major manufacturing sector was still struggling with rather sluggish demand.