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The rise of the dollar due to the rate of inflationary pressures by Reuters


Reuters. File photo: An employee of the Korea Exchange Bank counts এক 100 notes during a photo shoot at the bank’s headquarters in Seoul on April 28, 2010. REUTERS / Jo Yong-Hak

By Tom Westbrook

SINGAPORE (Reuters) – The dollar stabilized on Monday after its biggest weekly loss in more than a month as traders weighed the impact of inflation on the relative pace of inflation – keeping a watchful eye on US growth data and a European Central Bank meeting.

The greenback has softened since Federal Reserve Chair Jerome Powell said Friday, especially against the yen, although it is not yet time to start raising interest rates, even though it is time to start reducing asset purchases.

His remarks came as investors set a price target for the Fed rate hike that began in the second half of next year, and yet other central banks have begun to cut long dollar positions in the hope that it may move further soon.

On Monday, the dollar was firm at 16 1.1643 per euro and found a foot on the yen at 113.54 after Friday’s slide. The Australian and New Zealand dollars were placed below the multi-month high last week. [AUD/]

Antipodians, including Sterling, advanced this month as traders jerked for higher rates during the heat of inflation, with markets now looking at a 60% chance of Bank of England growth next week.

Sterling was up 0.1% at 3 1.3772, but analysts were wary of further gains, especially as the Fed edges tipping and tightening policy. Fixed were at $ 0.7473 and 0.7157.

“The risk to the dollar remains the opposite,” said Kim Mundi, a currency analyst at the Commonwealth Bank of Australia (OTC) in Sydney.

“(The Fed) members are slowly acknowledging that inflation risks are skewed in the opposite direction (and) the result is that interest rate markets can continue the price of a more aggressive Fed fund rate hike cycle that could support the dollar.”

This week, Wednesday’s Australian inflation data could set the tone for the next phase of the conflict between traders and a determined central bank.

On Thursday, U.S. growth data is expected to show a slowdown in growth as consumer confidence declines, but a surprise on both sides could have consequences for interest rate outlook.

Also on Thursday the Bank of Japan and the European Central Bank met. The policy of the two is not expected to be adjusted, but the measured inflation in the European market is in conflict with the Bank’s guidelines.

In the background, traders are concerned about the problems of indebted developer China Evergrand Group. It surprised investors by avoiding default by paying a last-minute coupon last week, but other stressful debt hairs.

More embarrassing than the five-month high in offshore trading at 3 6.3804 per dollar. Cryptocurrencies were stable below the highs reached last week, with Bitcoin rising 2% to $ 62,000.

The Turkish lira was tied for sale in emerging markets as state banks are expected to cut interest rates from the central bank.

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Currency bid price at 0110 GMT

Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid

Previous changes

Session

Euro dollars

1.1645 $ 1.1646 -0.01% -4.69% +1.1649 +1.1626

Dollar / Yen

113.7350 113.4900 + 0.18% + 10.07% +113.7400 +113.5750

Euro / Yen

132.45 132.17 + 0.21% + 4.35% +132.4500 +132.1200

Dollar / Swiss

0.9163 0.9162 + 0.00% + 3.56% +0.9169 +0.9157

Sterling / Dollar

1.3771 1.3756 + 0.13% + 0.81% +1.3775 +1.3752

Dollar / Canadian

1.2362 1.2368 -0.03% -2.90% +1.2379 +1.2358

Aussie / Dollar

0.7478 0.7470 + 0.11% -2.79% +0.7478 +0.7465

NZ

USD / USD 0.7161 0.7150 + 0.15% -0.29% +0.7162 +0.7148

All spots

Tokyo spot

Europe spots

Instability

Tokyo Forex Market Information from BOJ





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