* Graphics: World exchange rates https://tmsnrt.rs/2RBWI5E
Written by Saykat Chatterjee
LONDON, May 4 (Reuters) – The US dollar extended its gains on Tuesday, partially offsetting a month’s fall as investors weighed the odds for a rate hike from the booming US economic recovery and awaited forthcoming data and policy speeches for clues.
Tuesday’s rebound almost completely reversed Monday’s losses following a disappointing US manufacturing report, bringing it 1% above its monthly low reached last week.
Although the April survey data was lower than in March, the US economic recovery continued to confidently keep pace with rising price pressures, while the Federal Reserve did not appear to have been in any rush to tighten.
Financial conditions are far from where the Fed would consider abandoning its support, New York Fed President John Williams said Monday, despite the economy growing at its fastest pace in decades this year as it recovers from the crisis. pandemic coronavirus.
Commerzbank strategists said data from the US on durable goods orders and nonfarm employment would further signal economic recovery.
“However, since the market expectations, according to our experts, are too optimistic, this may put pressure on the dollar, despite the fundamentally positive results,” they said.
The dollar rose 0.6% against the antipodes currencies and 0.3% against the yen, euro and pound. Trade declined due to holidays in China and Japan.
The Dollar Index, which measures the dollar’s value against a basket of major competitors, rose 0.4% to 91.34, slightly below a two-week high.
Elsewhere, central bank meetings are in the spotlight. The Australian dollar weakened as the country’s central bank sharply raised forecasts for the local economy, but still did not predict tightening of its ultra-weak policy until at least 2024.
Sterling fell slightly to $ 1.3870 ahead of the Bank of England meeting on Thursday. Analysts believe the bank may announce a slowdown in its bond buying program as vaccinations have strengthened the UK economy.
Elsewhere, cryptocurrency Ether reached another all-time high, this time around $ 3,500, as speculators push the hot cryptocurrency markets up. Last time it cost $ 3313.
(Reporting by Saykata Chatterjee; editing by Simon Cameron-Moore)