Crypto currencies rallied, led by a surge in ether on good risk appetite and growing anticipation of an impending approval of spot ether ETFs by the U.S. SEC
The dollar struggled for direction on Tuesday as investors stuck to their views of the expected timing of Fed monetary easing this year.
Crypto currencies rallied, led by a surge in ether on good risk appetite and growing anticipation of an impending approval of spot ether ETFs by the U.S. SEC.
The euro inched up 0.06% to $1.0860.
Investors expect Thursday’s data from the ECB negotiated wage tracker and euro zone PMI to provide further clues about the monetary cycle in the euro area.
Meanwhile, with little on the U.S. economic data calendar this week to guide the direction of the dollar, investors’ focus is turning to a number of Fed speakers.
Several officials on Monday called for continued policy caution, even after data last week showed an easing in consumer price pressures in April.
Money markets priced in 42 basis points of Fed rate cuts this year – implying one 25 bps cut and a 68% probability of a second move by December – from fully pricing two cuts before recent hawkish comments from central bank officials.
Some analysts highlighted that Atlanta Fed President Raphael Bostic made dollar-positive remarks when he cautioned that the Federal Reserve’s benchmark rate would likely end up at a higher steady rate than in the past decade.
With few data releases of note, “the dollar’s rebound will have to wait for a more extensive washout of long positioning,” according to Themistoklis Fiotakis, head of forex strategy at Barclays.
In the absence of a compelling case for an abrupt U.S. slowdown or a global growth rebound, we still think more policy divergence needs to be priced in between the U.S. and other major central banks, ultimately favouring fresh longs, Fiotakis said.
Against other major currencies, the dollar declined 0.08% to 104.52.
