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USD rebounces as U.S. rates eyed

Gold prices fell to an eight-week low while U.S. dollar strengthened as investors awaited further clues on the future pace of U.S. interest rate hikes.

As the uncertainty over the French election came to end on Sunday, following Emmanuel Macron’s widely expected victory against far-right Marine Le Pen, investors have turned attention to U.S. monetary policy amid a surge in June rate hike expectations after hawkish comments from Federal Reserve officials, which prompted a rally in both U.S. Treasury yields and dollar.

Kansas City Fed President Esther George said on Tuesday, that the U.S. central bank should keep gradually raising short-term interest rates despite the recent slowdown in GDP and car sales.

Traders focused their attention on incoming issues including U.S. monetary policy. Bets on a June rate increase by the Federal Reserve have mounted in recent weeks but the pace of tightening from then on remains a question mark due to mixed economic figures for the beginning of the year.

In the geopolitical front, the most remarkable news is that North Korea plans to proceed with its sixth nuclear test despite U.S. President Donald Trump’s threat of possible military intervention.

Fi24h Editorial Board
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