The greenback adhered to a two-month high against a box of currencies in Asia on Monday after higher-than-expected U.S. GDP data last week improved its yield attraction in opposition to competing currencies.
The U.S. Federal Reserve is widely anticipated to cut rates of interest for the first time in over a decade this week; however, such a move is seen as a pre-emptive one to protect the economic system from global intricacies and trade tensions, in contrast to some other nations that face more threatening risks.
The greenback index =USD stood little modified at 97.919, after having reached a two-month high of 98.093 on Friday.
U.S. gross domestic product elevated at a 2.1% annualized rate in the second quarter, above the forecast of 1.8%, like a swell in consumer spending blunted some of the drag from sinking exports and a smaller inventory build.
The data pushed up U.S. bond yields and bonded expectations that the Fed will go for a lower rate of interest cut of 25 basis points, instead of 50 basis points, to 2.0-2.25%.
While U.S. money market futures price in an overall of almost 75 basis points of cuts by the end of the year to 1.5-1.75%, that still leaves the greenback with the highest rates of interest among leading currencies.
The European Central Bank waved last week that it’s likely to cut rates of interest deeper into negative and follow more easing measures in September to shore up the sagging eurozone economy.
The U.S. currency additionally got a minor boost from White House financial adviser Larry Kudlow, who said Friday that the Trump management has “ruled out” negotiating in markets to lower the U.S. greenback’s value.