Dollar Swings on US Data and Central Bank Expectations
The US dollar's trading mixed on Thursday as markets wait for fresh data. The dollar was stronger against the British pound and Canadian dollar, but weaker against the euro and Japanese yen.
Traders are in a wait-and-see mode ahead of weekly jobless claims and housing data due at 8:30 am ET. These numbers can quickly reshape expectations for how far the Federal Reserve will take interest rates, which matters because currencies often move less on what a central bank did yesterday and more on what markets think it'll do next.
The Fed raised its benchmark range to 3.75%-4.00% on Wednesday and signaled more hikes are possible if the economy stays resilient, supporting the dollar in general. However, Thursday's mixed tape shows the other half of the equation: what foreign central banks might do.
The euro ticked up after a eurozone inflation update, while sterling slipped after the Bank of England kept rates steady. The yen strengthened as investors looked ahead to a Bank of Japan decision expected after 10:30 pm ET Thursday evening, with many expecting a 25-basis-point rate increase.