He dollar fell globally this Thursday, after rising to almost three-week highs the day before, after the minutes of the last meeting of the United States Federal Reserve (Fed) They gave few clues about when the downward cycle in interest rates might begin.
Although those responsible for the Fed They were convinced that the inflation was being reined in and concerned about the risks to the economy from the central bank’s “overly restrictive” monetary policy, there were no clear clues as to when it might begin to ease rates, as authorities still consider it necessary for rates to remain restrictive for some time.
Against a basket of currencies, the dollar fell 0.11% to 102.29, after hitting a three-week high of 102.73 on Wednesday. He euro rose 0.25% to $1.0950, after falling to more than two-week lows on Wednesday after France and other European countries published their inflation figures. The pound sterling rose 0.25% to $1.2694.
Other data released on Wednesday showed that the US manufacturing sector continued to contract in December, although the pace of decline slowed, while supply of employment fell for the third consecutive month in November.
What the Fed minutes left behind
The minutes shed little light on when the rate cuts might begin. The officials of the Fed They were convinced at their meeting last month that the inflation was under control, with declining “upside risks” and growing concerns about the damage that an “overly tight” monetary policy could do to the economy.
According to minutes from the central bank’s Dec. 12-13 meeting, “nearly all participants indicated that a lower target range for federal interest rates would be appropriate by the end of 2024,” with several highlighting rising uncertainty. on how long it will be necessary to maintain a strict monetary policy.
“A few” officials of the Fed They said they felt the agency was approaching a point where it might face a trade-off between its dual goals of controlling inflation and maintain high employment rates, the kind of sacrifice that monetary policymakers have hoped to avoid in their search for a “soft landing” after the worst outbreak of inflation in 40 years.
“The participants pointed out the decrease in inflation observed during 2023, highlighting the recent downward shift in readings of inflation in six months in particular,” according to the minutes, which as of November was just below the Federal Reserve’s 2% target.
Depending on the tool CME FedWatchthe probability that the Fed start lowering rates in March is 72%, compared to 87% a week ago.
What happened to the dollar in Uruguay?
He dollar in the Uruguayan exchange market rose 0.17% compared to Tuesday, closing at 39,158 pesos, according to the official price of the Central Bank of Uruguay (BCU), thus chaining two days of rise at the beginning of the year and moving further away from the range of 38 pesos.
The US currency strengthened again against the Uruguayan peso this Wednesday, accumulating a monthly (and annual) variation of 0.35% after increasing 0.14 pesos.
Source: Ambito
