Today is the start of the two-day meeting of the Federal Reserve. Everything indicates that the US central bank will raise interest rates by at least 75 basis points in an attempt to curb inflation.
However, the recent weakening in economic data has led some traders to ponder the possibility of the Fed abandoning the idea of aggressively tightening its monetary policy so as not to hurt growth.
Also weighing on sentiment is Monday’s earnings warning from retail giant Walmart. The company says customers have cut back on discretionary spending.
For its part, the euro rose slightly against the dollar, 0.06% to the level of 1.0226 dollars. However, the single currency continues to face uncertainty over Russian gas supplies.
Gazprom, Russia’s state-backed energy company, said on Monday that supplies to the West via the Nord Stream 1 pipeline to Germany would be reduced to just 20% of capacity. The announcement came just days after the company restored production to 40% capacity following scheduled maintenance.
Sterling is also gaining ground against the dollar, rising 0.14% to the $1.2058 level. Investors are awaiting next week’s Bank of England monetary policy decision, with the central bank expected to raise interest rates by as much as 50 basis points.
The Australian dollar fell slightly after registering a one-month high against the dollar, settling at $0.6957. Key Australian inflation data is due out on Wednesday, with economists forecasting consumer price growth to hit its fastest pace in more than 30 years.
Source: Ambito
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