FED to determine fate of dollar this week
2023.01.30 01:39
FED to determine fate of dollar this week
By Kristina Sobol
Budrigannews.com – Before a slew of central bank meetings this week, including the Federal Reserve’s, traders were keenly focused on guidance for the path of interest rate rises, and on Monday, the dollar firmed and distanced itself from an eight-month trough.
The, which compares the dollar to a basket of currencies, increased by 0.03% to 101.92, moving away from the eight-month low of 101.50 set last week.
However, expectations that the Fed was nearing the end of its rate-hike cycle and that interest rates would not need to rise as high as previously feared kept it on track for a fourth monthly loss of 1.5 percent.
Sterling gained 0.01 percent to $1.24005 and 0.09 percent to $0.6500.
Prior to the Fed, European Central Bank (ECB), and Bank of England (BoE) policy meetings later this week, movements were muted.
Rodrigo Catril, a currency strategist at National Australia Bank (OTC:), stated, “We will range trade a little bit as the market tries to assess how the central banks behave…. I think, for all three it’s going to be more about what they say than what they do.” NAB).
The Fed is most likely to raise rates by 25 basis points, while the ECB and BoE are likely to raise rates by 50 basis points each.
At $1.08705, the euro was up 0.03% and on track for a nearly 1.5% monthly gain, marking its fourth consecutive month of gains.
The ECB’s policymakers’ continued hawkish rhetoric and waning concerns about a severe euro zone recession have bolstered the single currency.
The gained 0.11 percent to $0.71175, while the Japanese yen fell slightly to 129.94 dollars.
According to data released on Friday, the fastest annual increase in core consumer prices for the month of January in Japan’s capital marked the Bank of Japan under pressure to reduce its economic stimulus.
The upcoming Tuesday release of China’s purchasing managers’ index (PMI) data will be the primary focus as the country returns from its Lunar New Year holiday.
Catril of the NAB stated, “The market will be looking… hopefully not to be disappointed.”
“So far, the data or vibes from China do support the notion that a positive reopening in terms of activity is likely to occur.”
State media reported on Saturday that after COVID-19 travel restrictions were lifted, Lunar New Year holiday travel within China increased by 74% from the previous year.
