He dollar hit its highest level in two months against major currencies on Monday, as traders retracted bets on an aggressive cut in rates. interest rates on the part of the United States Federal Reserve (FED) this year.
The turnaround came after Friday’s strong jobs report in USAwhich far exceeded market expectations and skyrocketed the yields of the US bonds, boosting the country’s currency. Furthermore, the yields of Treasury bond rose further on Monday after Fed Chairman Jerome Powell He said the central bank could “give itself some time” before cutting interest rates.
Meanwhile, the japanese yen fell to its lowest level since early December in early trading in the Asian session to 148.82 units per dollar, before stabilizing at 148.43 yen. Meanwhile, the euro It was down 0.26% at $1.0762, near its lowest since mid-December. These moves helped the dollar index rise 0.12% to 104.17, its highest since December 11.
In an interview with the CBS news program “60 Minutes” broadcast Sunday night and conducted Thursday, Powell said the Fed could be “cautious” when deciding when to cut back interest rate reference. He asserted that a strong economy gave central bankers time to build confidence that the inflation would continue to slow down.
In that sense, the futures of the funds of the Federal Reserve They now foresee an easing of approximately 120 basis points (bps) this year, compared to 150 bps at the end of last year. The chance of a cut in March is now 16%, up from 50% a week ago.
The dollar in Uruguay
He dollar showed a daily decrease of 0.05% last Friday compared to Thursday and closed at 39,054 pesos, according to the price of the Central Bank of Uruguay (BCU), completing its third consecutive day of decline and remaining cents away from falling back to the 38 peso range.
The US currency thus maintains a negative level in February, with a decrease of 0.28% in its value. However the dollar It still accumulates a slight improvement of 0.08% so far this year, thanks to its appreciation in January.
After the United States Federal Reserve (Fed) decided to keep interest rates unchanged this month, the expectation in Uruguay begins to focus on what will happen in 20 days in the Monetary Policy Committee (Copom).
The authorities of the BCU will meet next Tuesday the 20th to define the new Monetary Policy Rate (TPM), after a year marked by a sharp cut in rates, where it relaxed the contractionary phase of monetary policy.
During 2023, the BCU led the rate reductions at the regional level, going from 11.5% to the current level of 9%. However, he anticipated that the cycle of cuts may end, unless inflation expectations remain aligned with what the monetary authority foresees.
Source: Ambito
