New York (awp/afp) – The dollar held steady against the euro on Tuesday in a calm market, still benefiting from political uncertainties in Europe.
Around 6:40 p.m. GMT, the greenback gained 0.1%, to 1.0733 dollars per euro. The dollar also gained 0.2% against the British pound, to 1.2702 dollars per pound.
The US dollar seems to continue “to benefit from European political uncertainties, regardless of data and speeches from the Fed (American central bank, Editor’s note)”, commented Ipek Ozkardeskaya, analyst at Swissquote.
If the gap between French and German bond yields has narrowed a little (2.39% for the German ten-year rate compared to 3.16% for the French rate), “the gap remains significant”, indicated Shaun Osborne, Scotiabank analyst.
Even if it has risen to around 1.06 dollars per euro, the European currency “is not yet in a safe zone” which would rise to 1.0750 dollars, added Mr. Osborne.
This analyst believes that “the tone remains constructive for the evolution of the dollar with a probable consolidation after last week’s advance, before rising again.”
As for American interest rates, if the Fed indicated last week that it only expected one rate cut this year, the market continues to envisage two at 67%, according to calculations on futures products from CME Group.
A Fed official on Tuesday was “cautiously optimistic” about the trajectory of inflation in the United States, and believes that rates could begin to be lowered by the end of the year.
“Cautiously optimistic about falling inflation,” Adriana Kugler, a Fed governor, judges that inflation “is still too high and is only falling slowly,” she said during a speech at the Brookings Institution.
A weaker than expected American indicator also pushed back ten-year bond yields, which fell to 4.21% compared to 4.28% the day before.
Retail sales, in fact, grew a little less than expected in May in the United States (+0.1%), while those for April were revised downward, a sign that consumption is stalling.
Over one year, they only advanced by 2.3%, without counting the share of inflation.
Elsewhere, the Reserve Bank of Australia (RBA) decided on Tuesday to keep its interest rate unchanged at 4.35%, its highest level in 12 years, a decision in line with market expectations. The Australian currency gained 0.61% to 1.5029 Australian dollars per US dollar.
“The RBA noted that inflation is falling” in Australia, “but more slowly than expected, and that it remains high”, while “the dynamics of economic activity (remains) weak”, explained Lee Hardman, analyst at MUFG.
Cours de mardi Cours de lundi 18H40 GMT 21H00 GMT EUR/USD 1,0733 1,0734 EUR/JPY 169,47 169,32 EUR/CHF 0,9493 0,9548 EUR/GBP 0,8449 0,8464 USD/JPY 157,89 157,74 USD/CHF 0,8845 0,8895 GBP/USD 1,2702 1,2705
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