Dollar regains traction as market anticipates rate hike at next Fed meeting

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Market Review - 16/03/2018 00:50GMT

Dollar regains traction as market anticipates rate hike at next Fed meeting

The greenback ended broadly higher against majority of its peers on Thursday as investors look forward to next week's Federal Reserve meeting where another interest rate hike is widely expected.

Versus the Japanese yen, dollar remained on the back foot n met renewed selling 106.36 in Australia , price fell to 105.83 in Asian morning on safe-haven buying in yen due to trade tension between the U.S. and China and then ratcheted to a one-week low of 105.79 ahead of European open before rebounding to 106.17 in Europe on short-covering. Price later ratcheted higher to session highs of 106.42 in New York afternoon due to broad-based usd' strength.

Despite staging a minor rebound to 1.2384 at Asian open, the single currency came under renewed selling pressure at European open and fell to 1.2352 in European morning, intra-day decline accelerated in New York trading and price later hit session lows of 1.2300 in New York.

The British pound went through a roller-coaster ride. Although price initially climbed to 1.3989 in European morning, cable then met renewed selling and fell in tandem with euro to session lows of 1.3922 in European morning before staging a strong rebound to 1.3987 in New York on cross-buying in sterling especially versus euro. However, price erased intra-day gain and fell back to 1.3926 on broad-based usd's strength.

In other news, Reuters reported U.S. import tariffs on metals should have a limited effect on a global recovery, but any escalation into a full-blown trade war and related growing uncertainty could cause tangible damage, the German economy ministry said on Thursday.

On the data front, the number of individuals filing for initial jobless benefits decreased by 4,000 to 226,000 the Labor Department said. Analysts had expected claims to fall to 230,000 last week.

Data to be released on Friday:

New Zealand manufacturing PMI, Japan industrial production, capacity utilization, Germany wholesale price index, Italy CPI, EU CPI, core CPI, U.S. building permits, housing starts, industrial production, capacity utilization, JOLTS job openings, University of Michigan sentiment, and Canada manufacturing sales

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