The global dollar waits for signs of the Fed’s monetary direction

The global dollar waits for signs of the Fed’s monetary direction

On Wednesday the US Central Bank will publish the minutes of its latest meeting, and agents wait for “signs” of future rate cuts.

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He global dollar its performance fell as investors await the publication of the minutes of the last meeting of the Federal Open Market Committee (FOMC), to have more clues about a possible relaxation of the monetary policy of the United States Federal Reserve (Fed). In Uruguay, Meanwhile, the currency fell for the second consecutive day, moving away from its maximum values ​​in a month.

With a slight decline of 0.08%, the dollar index —which compares the greenback with a basket of six relevant international currencies— was trading at 104.52 units in the early hours of Tuesday, with operators awaiting new signals from the Fed and while they cling to their opinions on the planned schedule for the first cuts in benchmark interest rates this year.

The comments of the authorities of the Central Bank, before the few economic data this week, are the ones that have guided the bets in recent days and that have led the US currency to hit a five-week low last Thursday.

In any case, those responsible for the Fed are reluctant to end the fight against inflation: the vice president Philip Jefferson He said Monday that it was too early to know if the slowdown is “lasting,” and the vice president Michael Barr He said that the restrictive policy needs more time. The minutes to be published on Wednesday could provide valuable information about the future path of monetary politics.

Although the key data will only be available on May 31, when the price index of personal consumption expenditures (PCE)the Fed’s preferred inflation indicator.

Two days of setback in Uruguay

In Uruguay, meanwhile, the dollar chained its second consecutive decline by falling 0.23% and closing with a value of 38,408 pesos, according to the official price of the Central Bank (BCU).

Despite this, the US currency accumulates a monthly increase of 0.23% in May, although it has an accumulated depreciation of 1.57% at an annual level, after falling 0.61 pesos since the last exchange day of the year 2023.

For its part, the last Economic Expectations Survey (EEE), corresponding to May, recorded that agents moderated their expectations regarding the evolution of the exchange rate and, while by the end of this month they expect the US currency to hover around an average of 38.5 pesos; By the end of the year they indicated a value of 40 pesos, still far from what the agro-export sectors expect for today, of 44 pesos.

Source: Ambito

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