Dollar broadly supported Friday, boosted by Fed rate hike hopes

Dollar broadly supported Friday, boosted by Fed rate hike hopes

10 April 2015, 15:44

On Friday growing expectations for a US rate hike lent a broad support to the greenback pushing it higher against its peers.

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.

Moreover, 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 dropped 0.60% to one-week lows of 1.0596, 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%.

Newly released data indicated 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 pound was also lower, with GBP/USD sliding 0.72% to 1.4605.

In the UK, the Office for National Statistics said in a report that U.K. manufacturing production rose 0.4% in February, in line with expectations. On an annual basis, U.K. manufacturing production rose 1.1% in February, disappointing expectations for a 1.3% gain.

It 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 declined against the yen, with USD/JPY shedding 0.23% to 120.30 but higher against the Swiss franc, with USD/CHF up 0.34% to 0.9808.

USD/CAD rose 0.30% to trade at 1.2615 after data showed that the number of employed people in Canada rose by 28.700 last month, exceeding expectations for a decline of 100 and after a 1,000 drop in February.

The report also showed that Canada's unemployment rate remained unchanged at 6.8% in March, in line with expectations. Another report showed that Canadian housing starts rose by 189,700 units last month, beating expectations for an increase of 175,000. February's figure was revised to a 151,200 increase from a previously estimated 156,300 gain.

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