The US dollar gained slightly on the euro Wednesday morning in New York, putting it on track to its first monthly gain versus the euro this year.

The greenback was helped by the possibility that an expected rate cut from the Federal Reserve today will be the last cut for the time being.

At just past 11 a.m. in New York, the dollar traded at $1.5563 to the euro while it had also gained in relation to the yen, to ¥104.4950.

The yen was weaker on the session as the Bank of Japan held interest rates at 0.5 percent and gains in US equities markets increased investor interest in carry trades financed by the low-yielding yen.

The yen traded at ¥162.6255 to the euro, while its biggest declines were in relation to the Brazilian real and the Canadian dollar, to ¥61.598 and ¥103.3683 respectively.

The South African rand gained in relation to all major currencies on the session and had its biggest monthly gain in four years in April on speculation that the reserve bank there will hike interest rates when it meets next, up from a five-year high of 11.5 percent currently.

Also helping the rand was a reduction in South Africa’s trade deficit, which dropped from R5.8 billion in February to R5 billion in March on high prices for gold and platinum.

In late morning trade in New York, the rand traded at $7.5775 to the US dollar and at R11.794 versus the euro, while a rand was worth ¥13.808.

The Canadian dollar also strengthened in relation to all major currencies, mainly on the chance that US interest rate cuts are about to end.

It took 98.92 cents US to buy a Canadian dollar at late morning in New York.

Days after the dollar touched a new nadir against the euro -– indeed, one euro briefly fetched $1.60, a symbolic milestone -– the beleaguered buck is enjoying a bounce.

Some even saw a parallel to politics. “Just like Hillary Clinton, when all seemed bleak, USD staged an almost improbable recovery,” wrote David Watt, a currency strategist at RBC Capital Markets late Thursday.

By this morning, one euro bought about $1.56.

Of course, the dollar has had many such minor rebounds, and they always turn out to be short-lived. Several currency experts, however, see a hint that something different might be happening this time around.

Much of the euro’s recent invincibility stems from two factors. One, economic growth in the euro zone has been remarkably impervious to events in the U.S. Two, the U.S. Federal Reserve has embarked on a dramatic campaign to cut interest rates, undermining the appeal of short-term investments in dollars, while the European Central Bank has held its rates firm.

Now two small cracks have appeared in that armor. On Thursday, Germany’s IFO survey of business sentiment came in lower than expected, indicating deteriorating conditions in Europe’s largest economy. At the same time, some investors believe that the Fed will cut its key rate next week but then take an extended pause, stabilizing the gap between U.S. and European interest rates.

If bad news out of Europe starts to accumulate and the Fed stands pat, the dollar’s slide could taper off. However, that’s probably not the end of the dollar’s travails.

“What’s the endgame?” says Art Steinmetz, a bond portfolio manager at OppenheimerFunds. “The ECB goes into an easing cycle at about the time the Fed is going into a hiking cycle.”

That’s still months away (if not more). But some are keeping a very close eye on the horizon.

Source: http://blogs.wsj.com/marketbeat

The euro gained on the US dollar and the pound on Friday after an official of the European Central Bank assured that interest rates would not drop in the Eurozone in comments ahead of a meeting to G7 finance ministers and central bankers in Washington, D. C.

In late morning trade in New York, the euro was worth $1.5823 while the pound traded at 80.23p to the euro after hitting a new low at 80.33p to the shared currency.

Consumer confidence that hit its lowest level in 26 years in the United States hurt the dollar, while the pound suffered from the assumption that the Bank of England will likely continue to cut interest rates while the ECB seems determined to hold Eurozone rates steady.

The South African rand was higher versus the greenback after yesterday’s move by the central bank there to raise interest rates to 11.5 percent, a half-percentage-point increase.

The rand traded as high as R7.7487 to the greenback before trading at R7.8055 to the dollar in late morning trade in New York.

Only the yen and the Swiss franc gained in relation to the rand on the session, with a rand buying ¥12.943 and trading at R7,8051 to the Swiss franc, as investors avoided carry trades.

The reluctance to enter into risky deals such as carry trades helped the yen and Swiss franc to gains against all major currencies.

At late morning in New York, the yen traded at ¥101.0800 to the dollar and at ¥159.9339 to the euro, while the Swiss franc was at SFr1.0002 to the greenback and at SFr1.5826 to the euro.

The pound was weaker on Tuesday after a new report from mortgage lender Halifax showed that house prices fell by 2.5 percent in March.

The price declines made it more likely that the Bank of England will cut interest rates soon.

At around 11 a.m. in New York, the pound traded at 79.81p to the euro and at 50.81p to the US dollar, while it took ¥201.8488 or SFr1.9953 to buy a pound.

The US dollar was slightly weaker versus the euro and the yen ahead of the release of the minutes from the most recent meeting of the Federal Reserve, due to be released later on Tuesday afternoon.

The greenback was trading at $1.5696 to the euro and was worth ¥102.6450 in late morning trade in New York.

Speculation that the South African Reserve Bank will hike interest rates to 11.25 percent later this week send the rand higher in relation to the US dollar.

After strengthening to R7.76475 to the greenback, the rand traded at R7.7865 at close to noon in New York.

Meanwhile, the Australian dollar saw gains on a return to carry trades as investors worried less about credit market problems and on higher prices for commodities.

The Australian dollar was worth 92.77 cents US or ¥95.1445, while it took A$1.6932 to buy a euro.