Ray V
SINGAPORE (Reuters) – The dollar strengthened on Tuesday while the yen struggled on the weaker side of the 156 level, although trading was mostly range-bound as investors broadly stuck to their views on the expected timing and extent of Federal Reserve rate cuts this year. year.
Cryptocurrencies rose, helped by a surge in ether on growing anticipation of the upcoming approval of spot ether exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC).
Against the yen, the dollar rose 0.11% to 156.41 in Asia.
The yen has traded in a tight range over the past few sessions as fears of further intervention from Japanese authorities kept traders from pushing the currency to new lows. However, the still sharp difference in interest rates between the US and Japan supported the yen’s attractiveness as a financing currency.
Elsewhere, the euro rose 0.02% to $1.0859, while sterling similarly rose 0.04% to $1.27115.
With little on the US economic data calendar this week to determine the currency’s direction, investors’ attention is turning to a slew of Fed speeches for clues about the outlook for US interest rates and how soon the easing cycle could begin.
Several officials on Monday called for continued caution, even after data last week showed a welcome easing of pressure on consumer prices in April.
“I think all the comments from different officials will contain the same messages and the main message for the FOMC will be to continue a patient approach to lowering interest rates,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.
However, the Fed’s cautious rhetoric has so far done little to make much of a difference in market prices for rate cuts as investors bet on two cuts this year starting in September.
Against a basket of currencies, the dollar stabilized at 104.62.
The New Zealand dollar fell 0.09% to $0.61005 and fell 0.14% to $0.6658.
Minutes from the Reserve Bank of Australia’s May meeting, released on Tuesday, showed the central bank had decided to leave interest rates unchanged, partly to avoid “excessive fine-tuning” of policy, but considered they might need to be raised if inflation forecasts were too optimistic.
Across the crypto universe, Ether jumped more than 5% to a more than one-month high of $3,720.80 after rising nearly 14% in the previous session, its biggest daily percentage gain since November 2022.
broke above the $70,000 level and was last trading 2% above the $70,980 level.
Analysts say the latest cryptocurrency rally comes amid speculation that approval of spot ether ETFs by the US SEC could be imminent, following in the footsteps of the listing of a Bitcoin ETF earlier this year.
“It’s absolutely great,” said Tony Sycamore, market analyst at IG. “I think it’s partly due to this speculation, but also last week’s US core inflation data, which increased risk appetite and obviously brought rate cuts back into play.
“After the SEC approval in January and then the halving, it was missing some catalyst in terms of what would be the next key driver for cryptocurrencies, and I think it will always come back to macroeconomics. .And the macroeconomic indicators have been really very good since last Wednesday.”