Dollar crawls higher, as hopes for rate hike keep supporting US currency

Dollar crawls higher, as hopes for rate hike keep supporting US currency

10 April 2015, 11:45

On Friday the dollar was higher against its peers, as growing expectations for a U.S. rate hike by the middle of the year continued to lend broad support to the greenback.

Several factors lent a broad support to the dollar. On Wednesday New York Federal Reserve President William Dudley said that the timing of the policy will depend on the strength of the economic recovery, thus the rate hike is still possible in June. Several Fed officials also believe the economic outlook is likely to warrant an interest rate hike in June, as Wednesday’s minutes of the Fed’s March meeting showed.

On Thursday the U.S. Department of Labor reported that the number of individuals filing for initial jobless benefits last week rose less-than-expected - the news which also gave a boost to the greenback.

EUR/USD dipped 0.51% to one-week lows of 1.0603, even as data earlier showed that French industrial production was flat in February, confounding expectations for a 0.1% downtick. January's figure was revised to a 0.3% rise from a previously estimated increase of 0.4%.

A separate report showed that Spain's industrial production increased at an annualized rate of 0.6% in February after a 0.1% gain in January, whose figure was revised from a previously estimated 0.4% rise.

The British currency was also lower, with GBP/USD sliding 0.48% to 1.4642.

The Office for National Statistics said in a report that U.K. manufacturing production rose 0.4% in February, in line with expectations and after a downwardly revised 0.6% decline the previous month.

U.K. manufacturing production rose 1.1% in February on a yearly basis, disappointing expectations for a 1.3% gain.

The report also showed that U.K. industrial production rose 0.1% in February, confounding expectations for a 0.3% increase. Year-on-year, U.K. industrial production ticked up 0.1% in February, less than the expected 0.4% rise.

The dollar was lower against the yen, with USD/JPY sliding 0.20% to 120.34 but higher against the Swiss franc, with USD/CHF up 0.20% to 0.9796.

The commodity-linked Australian, New Zealand and Canadian dollars were broadly weaker, with AUD/USD slipping 0.22% to 0.7674 and NZD/USD falling 0.34% to 0.7541, while USD/CAD rose 0.23% to trade at 1.2608.

Earlier, data indicated that Australia's home loans rose 1.2% in February, disappointing expectations for an increase of 3.0%. January's figure was revised to a 1.7% drop from a previously estimated 3.5% decline.

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