By Rae Wee
SINGAPORE, April 24 (Reuters) - The dollar began the
last trading week of the month on a firmer footing, with traders
awaiting a slew of central bank policy meetings that could
signal how soon the steep increases in interest rates globally
might come to an end.
U.S. Federal Reserve policymakers are widely expected to
raise rates by another 25 basis points at next week's
Federal Open Market Committee (FOMC) meeting, though the focus
will be on the guidance for the future rate path.
While recent economic data have pointed to slowing U.S.
growth, parts of the economy continue to show resilience while
inflation remains sticky, leaving traders debating the scale of
rate cuts expected as early as July through to the end of the
year. The U.S. dollar rose broadly against most major currencies
in Asia trade, with the euro and sterling slipping 0.07% to $1.0981 and 0.06% to $1.2437, respectively.
The Aussie fell 0.29% to $0.6674.
The U.S. dollar index rose 0.13% to 101.81, but was
on course for a monthly loss of more than 0.7%, having fallen
over 2% in March.
Data released on Friday showed that U.S. and euro zone
business activity gathered pace in April, reducing concerns
about an impending recession in major economies.
"The takeaway from the various PMIs is that the services
sector both in Europe and the U.S. seems to be pretty
resilient," said Ray Attrill, head of FX strategy at National
Australia Bank.
"There's nothing, as yet, to hang your hat on rate cuts in
the second half of the year," he added, noting inflation-related
indicators would need to show more evidence of price pressures
subsiding.
Markets are expecting the European Central Bank (ECB), which
also meets next week, to raise rates by a quarter point, with
some chance of a 50bp hike. ECB President Christine Lagarde said last week that
inflation in the euro zone remains too high and the ECB's
monetary policy "still has a bit of way to go" to bring back
inflation towards its 2% goal.
Elsewhere, the kiwi fell 0.15% to $0.6130/
In Asia, the Bank of Japan's policy meeting this week takes
centre stage, as it marks the first meeting to be chaired by new
BOJ Governor Kazuo Ueda.
Ueda is widely expected to maintain the BOJ's current
ultra-easy policy at the meeting, having reassured markets since
succeeding Haruhiko Kuroda early this month that any change in
policy won't happen quickly.
"We still look for a removal of the YCC (yield curve
control) regime, an interest rate hike at some stage this year
amid broadening inflationary pressures and upward pressure on
wage growth in Japan," said OCBC currency strategist Christopher
Wong.
The yen was last roughly 0.2% lower at 134.41 per U.S.
dollar .
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Rae Wee in Singapore; Editing by Lincoln Feast &
Simon Cameron-Moore)