U.S. Dollar Appreciates On Fed Rate Hike Prospects

(RTTNews) - The U.S. dollar climbed against its major counterparts in the Asian session on Friday along with treasury yields, on hopes that the Federal Reserve will continue to raise rates aggressively following strong U.S. economic data released overnight.

Encouraging U.S. economic data on retail sales and jobless claims cemented the possibility of aggressive rate hikes from the Fed.

Markets see a 76 percent chance that the Fed will raise interest rates by 75 basis points next week.

The safe-haven dollar was further supported by a decline in Asian shares, as the World Bank and the International Monetary Fund warned of a risk of global recession.

The World Bank said on Thursday that the world's three largest economies—the United States, China, and the euro area—have been slowing sharply and even a moderate risk to the global economy over the next year could tip it into recession.

The greenback rose 0.3 percent to 0.5945 against the kiwi, setting a 2-1/2-year high. If the greenback climbs further, 0.57 is likely seen as its next resistance level.

The USD/CAD pair firmed 0.4 percent to 1.3289, its highest level since November 2020. Next key resistance for the greenback is seen around the 1.34 region.

The greenback touched 0.6670 against the aussie, a level unseen since June 2020. The greenback is likely to challenge resistance around the 0.64 level.

The greenback edged up to 143.69 against the yen and 0.9976 against the euro, off its early lows of 142.83 and 1.0012, respectively. The greenback is seen finding resistance around 147.00 against the yen and 0.96 against the euro.

The USD/CHF pair approached a 1-week high of 0.9646. The greenback may locate resistance near the 0.98 area.

The greenback was up against the pound, at a 9-day high of 1.1408. The next likely resistance for the greenback is seen around the 1.11 level.

Looking ahead, Eurozone final inflation data for August will be released in the European session.

At 8:15 am ET, Canada housing starts for August are scheduled for release.

Canada wholesale sales for July and University of Michigan's preliminary consumer sentiment index for September are due in the New York session.