February 28, 2024

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Dollar rises from three-month low;  Bank of New Zealand decision raises its currency via Reuters

Dollar rises from three-month low; Bank of New Zealand decision raises its currency via Reuters

© Reuters.

By Harry Robertson and Ray Vee

LONDON/SINGAPORE, Nov 29: The US dollar rose on Wednesday after falling to a more than three-month low on hopes that the Federal Reserve will cut interest rates soon.

* The New Zealand dollar rose 0.49% to $0.6166 on Wednesday after the Reserve Bank of New Zealand left interest rates on hold on Wednesday, warning that further tightening of monetary policy is necessary.

* On Tuesday, comments by Federal Reserve official Christopher Waller hinted at a possible interest rate cut in the coming months, sending U.S. bond yields and the dollar lower.

* The , which compares the U.S. currency against a basket of six currencies, hit its lowest level since early August at 102.46. It has since recovered some of its losses to rise 0.12% to 102.73, but was on track to lose 3.7% in November, its biggest monthly drop in a year.

* The yield on the 10-year U.S. Treasury note fell 5 basis points (bps) on Tuesday and fell by the same amount again on Wednesday to 4.2898%, the lowest level since mid-September.

* Yields tend to move inversely with prices, and lower bond yields make a country’s fixed income investments appear less attractive relative to their peers, weighted by the local currency.

* On Tuesday, the euro briefly rose above $1.10 for the first time since August, but pared its gains to trade at $1.0991.

* Inflation data from Spain and the German state of North Rhine-Westphalia showed price pressures in the euro zone continued to ease in November.

* Euro zone inflation data will be released on Thursday, ahead of the personal consumption expenditures (PCE) index, the US Federal Reserve’s preferred measure of inflation.

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* The Japanese yen, particularly sensitive to US bond yields, was higher on Wednesday. The dollar was little changed at 147.37 yen, down from a more than two-month low of 146.68 yen.

* He ended the local session at 7.1246 units per dollar, the highest since June 16.

(Reporting by Harry Robertson in London and Ray Wei in Singapore; Editing in Spanish by Ricardo Figueroa)