The dollar falls slightly and the pound sterling is behind this Tuesday, March 21, since the operators considered that the tensions in the banking sector would prevent the Federal Reserve and the Bank of England raise rates much more this week.
Investors remain concerned about the fate of the banking sectorafter the actions of the American lender First Republic plunged nearly 50% on Monday fearing that he needs a second rescue. But the European banks rose on Tuesday for the second day in a row, alleviating some of those fears following the acquisition of Credit Suisse by UBS Groupbacked by the state.
Attention now turns to the central bank meetings taking place this week. In the case of the Federal Reserve of the United States, the markets value at 25% the possibility that it will keep its rates unchanged when it announces its monetary policy decision on Wednesday, and a 75% chance of a 25 basis point rate hike, according to CME’s FedWatch tool.
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The dollar has followed these expectations downward, although the general nervousness of the financial markets has moderated the selling.
The greenback falls 0.6% to $1.0779 per euroMeanwhile he dollar index -which measures the performance of the US currency against a basket of six currencies- loses 0.2% to 102,720.
In a context of instability in global financial markets, UK inflation data on Wednesday is expected to show some moderationso the money markets are pricing in a 50% chance the Bank of England won’t raise rates of interest on Thursday and in the same percentage the possibility of a rise of 25 basis points. Sterling is down 0.35% at $1.2234.
The Norwegian krone rose 0.35% to 10.6120 per dollar, after falling to its lowest level since early October last week. According to a Reuters poll, the norwegian central bank raise its benchmark interest rate by 25 basis points to 3% this week to curb inflation and prop up a weakening currency.
The dollar rose 0.8% against the Japanese currency to 132.41 yenafter posting its biggest daily drop against the yen in more than two months on Friday.
Source: Ambito
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