The dollar holds firm against its major rivals as expectations for a Fed rate cut is diminishing following last week’s upbeat economic data.
The comments from the Fed official Lacker today also helped to support the greenback. He said the Fed need to get back to contain core inflation between 1 and 2%. He added inflation is a predominant concern at present time for the Fed. US growth Return to trend by the end of the year. Nevertheless, he mentioned that the housing will be a drag on US economy for a couple of more quarters.
China Vice Premier Wu Yi and US Treasury Secretary Henry Paulson started their two-day meeting in Washington today. China is on the way of allowing the yuan more flexibility.
The euro failed to rise versus the dollar though Germany ZEW investors survey came in better than expectations. The ZEW headline came in at 24 as expected, up from 16.5 in April. The ZEW current situation rose from 76.9 to 88 in May, above the estimate of 79.
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