Dollar rises as sticky inflation underpins Fed rate hike bets, debt-ceiling deal boosts optimism

U.S. Treasury yields jumped on the data, with two-year yields, which typically reflect near-term interest rate expectations, rising more than basis points over two – April highs. 78% on Friday. [us/] Cash U.S. Treasuries were not traded in Asia on Monday due to the U.S. Memorial Day holiday, while futures were largely steady. The implied rate of return for ten-year futures is 3. 12%. UK markets are also closed on Monday for a holiday.

EUR/USD fell 0.% to $1. 68, while the British pound fell 0. % arrive 1. 140.

“Whether the dollar can sustain the gains we’ve seen, I think it will depend especially on the wages data, or the jobs report on Friday. Average income, obviously we also have CPI ahead of the Fed,” said Ray Attrill, director of foreign exchange strategy at the National Australia Bank (OTC: 2025 NABZY

) (NAB).

“There’s still a lot of data flowing under the bridge before we get to the June meeting.” The currency market is now pricing at almost 07% Possibility of Fed rate hike02 June basis, compared to roughly

% Chance is a week Before, according to the CME FedWatch tool.

Is the debt deal done?

Risk sentiment in Asia was boosted over the weekend by news that US President Joe Biden reached a budget deal with House Speaker Kevin McCarthy to suspend the dollar .$4 Trillion Debt Ceiling Until Jan 1st, 91.

Biden said on Sunday the deal was ready for a vote in Congress.

The risk-sensitive Australian and New Zealand dollars edged higher, with 500 AUD Up 0.% is $0. 400.

this1000 Kiwi gets 0.% to $0. 104.

“So far our reaction to news of the debt deal has been positive,” NAB’s Attrill said.

“Obviously there is still a need to get this debt deal done, but I think the market is happy to assume it will be done by the new X date.”

U.S. Treasury Secretary Janet Yellen said on Friday that the government will default if Congress does not raise the value of the dollar .4 trillion debt ceiling until June 5th, having previously said a default could occur as early as June 1st.

The dollar rose 0.0 against a basket of currencies. % arrive17..

elsewhere, Turkish Lira been under pressure . per dollar, before falling to an all-time low . $5 a week.

President Tayyip Erdogan won Sunday’s presidential election, extending his increasingly authoritarian rule to a first Three decades. 400