Reuters, MILAN, May 2 –
Concerns over economic growth lingered ahead of an expected U.S. rate hike this week. After data revealed COVID-19 lockdowns hindered China’s manufacturing activity. Stocks dipped and the dollar held near highs in holiday-thinned trading on Monday.
On Monday, euro zone manufacturing production growth slowed in April. Manufacturers struggled to get raw materials, while demand was hit by hefty price hikes and fears about the economy.
This has fueled fears of a dramatic slowdown in the second quarter. The would drag on global economy at a time when central banks across the world are aggressively tightening policy to address inflationary pressures, which have been worsened this year by the conflict in Ukraine.
Investors expect the Fed to raise interest rates by 50 basis points on Wednesday. However the Chair’s hawkishness remains a question.
“However, currency traders are unsure whether Powell’s dovish, neutral, or hawkish words would accompany this significant step forward, in the Fed’s policy-tightening process,” they wrote in a note.
As investors braced for a possible Fed rate hike, the dollar drew closer to a nearly two-decade. he euro fell to $1.05.0