WASHINGTON (dpa-AFX) - The U.S. dollar firmed against its major counterparts on Wednesday, tracking higher bond yields amid bets the Federal Reserve will cut interest rates at a slower pace. The greenback's rise was also due to somewhat rising prospects of a Donald Trump presidency.
It is feared that Trump policies including tariffs and restrictions on undocumented immigration could increase inflation and keep interest rates relatively high for a longer-than-anticipated period.
Following the Federal Reserve's decision last month to cut interest rates by 50 basis points, and the recent fairly upbeat economic data, CME Group's FedWatch Tool is currently indicating an 89.0 percent chance of just a 25 basis point rate cut next month.
In economic news today, data from the National Association of Realtors said existing home sales slid by 1% to an annual rate of 3.84 million in September, after tumbling by 2% to a revised rate of 3.88 million in August.
Economists had expected existing home sales to increase by 1% to a rate of 3.90 million from the 3.86 million originally reported for the previous month.
The dollar index, which climbed to 104.57 in early New York session, pared some gains subsequently and was last seen at 104.40, up 0.31% from the previous close.
Against the Euro, the dollar strengthened to 1.0787 from 1.0801, and firmed to 1.2922 against Pound Sterling from 1.2984.
The dollar climbed against the Japanese currency, fetching 152.75 yen a unit, compared to 151.09 yen on Tuesday. Against the Aussie, the dollar firmed to 0.6634 from 0.6683.
The Swiss franc weakened to 0.8665 against the dollar. The Loonie eased against the U.S. dollar after the Bank of Canada cut interest rates by 50 basis points. The loonie weakened to 1.3866 a unit of the greenback before recovering to 1.3838.
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