U.S. Dollar Inches Higher Amid Ongoing Fed Rate Hike Bets Despite Decline In Crude Oil Prices

(RTTNews) - The U.S. Dollar value edged higher as investors assessed the ongoing bets on rate hike by the U.S. Federal Reserve along with Fed Chair Kevin Warsh's remarks highlighting inflationary pressures. The plunge today in crude oil prices capped the gains.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 101.43, up by 0.19 (or 0.19%) today.

The Challenger job cuts data revealed that U.S. based employers announced 45,849 job cuts in June, down 53.00% from May and 4.00% lower than in the same month last year.

The U.S. Automatic Data Processing data revealed that private employers added 98,000 jobs in June, below 122,000 in May and forecasts of 113,000.

The Mortgage Bankers Association of America revealed that the Purchase Index in the U.S. increased to 170.60 on June 26 from 169.70 of the previous week.

The S&P Global U.S. Manufacturing Purchasing Managers' Index was sharply revised down to 53.90 in June, significantly below the preliminary estimate of 55.70 and May's final reading of 55.10.

The Institute for Supply Management's Manufacturing PMI fell to 53.30 in June, down from 54.00 in May and below market expectations of 54.00.

While against the Euro, USD was trading at 1.138, up by 0.41%, against the GBP, it was trading at 1.327, down by 0.10%.

Against the USD, the Japanese Yen was trading at 162.602, down by 0.06%; the Swiss Franc was trading at 0.810, down by 0.17%; and the Canadian Dollar was trading at 1.422, down by 0.16%.

Against one unit of Australian Dollar, USD was trading at 0.689, up by 0.38%. The S&P Global Australia Manufacturing PMI was revised higher to 51.5 in June from the initial estimates of 51.2 and up from 50.7 in May.

Today, at the European Central Bank's Forum on Central Banking held in Sintra, Portugal, Warsh remarked that inflation was too elevated though he refrained from any comments on interest rate plans for July.

Warsh noted that prices are too high and stressed that he will stick firmly to the central bank's 2.00% inflation target.

Recently, the Federal Open Market Committee hinted at increasing the interest rates.

Nearly half of the 18 members of the FOMC stressed on the need for a rate-hike this year while others preferred to continue to hold on the rates and to opt for a lengthy pause.

Currently, investors are betting on a 27.30% chance of a quarter-basis-point interest rate-hike in the upcoming Fed's meeting on July 28-29 while the bets on rates being held at the current level stand at 72.70%, according to the CME Group's FedWatch Tool.

On the geopolitical front, U.S. President Donald Trump described the progress in indirect talks between the U.S. and Iran as "very good" and added that the denuclearization of Iran is moving along very well.

Further, the Wall Street Journal reported that Trump held multiple conversations with Defense Secretary Pete Hegseth and the Chairman of the Joint Chiefs of Staff General Dan Caine about resuming the war with Iran but has opted to give diplomacy a full chance.

Reportedly, Trump is willing to extend the 60-day truce agreed on June 17, if needed, for discussing Iran's nuclear ambitions. Resumption of shipping traffic across the Strait of Hormuz since then has eased oil-linked inflationary concerns.

In its latest survey involving nearly 90 institutions including central banks, public pension funds, and sovereign wealth funds, the Official Monetary and Financial Institutions Forum (OMFIF) revealed that more central banks around the world are planning to reduce their holdings on dollar and instead prefer to strengthen their gold reserves.

Nearly 30% of the respondents intended to boost their gold allocation over the next couple of years.