New York money market conditions: Dollar strengthens on expectations that the Fed will keep interest rates high.
InfoQuest – The US dollar rose against major currencies in trade on the New York Forex Exchange on Friday (March 15) after the release of a series of data showing the US economy was flat and slightly weaker. This would allow the Federal Reserve (Fed) to keep interest rates higher for longer or reduce the number of rate cuts planned this year.
The dollar index, which measures the greenback's movement against six major currencies, rose 0.07% this week to 103.432. This is the biggest increase since mid-January.
The dollar rose 0.5% to 149.02 yen and is up 1.3% this week. This is the weekly increase since mid-January.
The euro was slightly higher at 1.0889 and the pound was down 0.1% at $1.2737.
Total US industrial production rose 0.1% on a monthly basis in February, after falling 0.5% in January and year-on-year, the US Federal Reserve (Fed) announced on Friday. Industrial production fell 0.2% in February.
As for US consumer confidence data, there was virtually no change. A University of Michigan survey showed that the US consumer confidence index fell to 76.5 in March, falling below analysts' expectations of 77.4 from 76.9 in February.
Meanwhile, consumers expect inflation to rise 3.0% over the next year, unchanged from February's forecast. Additionally, consumers expect inflation to rise 2.9% over the next five years, unchanged from February's forecast.
Investors are keeping an eye on next week's Fed meeting (March 19-20). Although no changes in interest rates were expected, data on producer and consumer prices in the US was warmer than expected this week. This led investors to lower their expectations of future interest rate cuts.
Investors will keep an eye on the Bank of Japan (BOJ) meeting next week. This is expected to end the implementation of negative interest rate policy
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