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Title: Dollar Down Despite Growing Expectations of Aggressive Monetary Tightening

Jun 15, 2022 12:33AM ET

By: AnalysisWatch

The dollar was down in Asia on Wednesday morning, despite investors betting on aggressive rate hikes at the Federal Reserve meeting.

The U.S. Dollar Index, which tracks the greenback against a basket of other currencies, fell 0.23% to 105.27 by 12:27 AM ET

The USD/JPY pair fell 0.29% to 135.09, with the pair hitting a fresh 24-year low.

The AUD/USD pair rose 0.48% to 0.6900, and the NZD/USD pair gained 0.21% to 0.6226.

The USD/CNY pair fell 0.28% to 6.7224, while the GBP/USD pair gained 0.18% to 1.2014.

Official data showed on Wednesday that Chinese industrial production rose 0.7% year-on-year in May, better than market expectations. In April, output had fallen 2.9%, while forecasts compiled by predicted a 0.7% decline. However, the new COVID-19 outbreaks and subsequent curbs added to concerns about the second-largest country's uncertain recovery path.

The Fed will announce its monetary policy decisions later today. The central bank is expected to raise interest rates by 75 basis points as the US consumer price index (CPI) rose 8.6% year-on-year in May, the most in 40 years.

Investors are now also waiting for policy decisions from global central banks. The Bank of England will announce its monetary policy decision on Thursday and the Bank of Japan the following day.

On the data front, the US Producer Price Index (PPI), released on Tuesday, rose 0.8% in May from the previous month.

Among cryptocurrencies, Bitcoin stabilised at around $22,000.

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