The dollar trades around five-week lows this Wednesday, March 22, before the conclusion of the Federal Reserve monetary policy meeting in which investors will look for any clue as to what could happen to interest rates given the turmoil in the banking sector.
He dollar indexwhich compares the US currency with six other currencies, lost 0.2% to 102.70 units.
The markets show that a quarter point rate hike is most likelybut investors will be very attentive to what the market says Fed Chairman Jerome Powell on the financial crisis that has rocked world banks this month and how careful the central bank thinks it needs to be.
The markets value at 15% the possibility that the Federal Reserve does not raise rates and in a 85% that he does it in 25 basis points, according to CME’s FedWatch tool. Just a month before, the market valued the possibility of a rise of 50 basis points at 24%.
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The Federal Reserve, along with other major central banks, has taken steps to grease the gears of the financial systemafter the bankruptcy of several small US lenders and the implosion of Credit Suisse over the weekend they unleashed enormous volatility in the markets and a fall in stocks and bank bonds in particular.
Following the acquisition of Credit Suisse by UBS, and the help of the authorities and the big US banks to some of the most vulnerable regional entities, investors breathe a little calmer which has led to the dollar losing some of its appeal as a safe haven this week.
The Fed meeting concludes on Wednesday with the release of a monetary policy statementfollowed by a Powell’s press conference.
The pound was the currency of the G10 who behaves best during the day, with a rise of 0.6% against the dollarafter the data showed that the UK inflation was much higher than expected in Februaryputting Bank of England officials in a tough spot when they meet on Thursday.
The markets show that traders are now they take for granted a rise of 25 basis pointswhereas just 24 hours ago, the chances of the bank going up a quarter point or staying out were 50%.
He euro falls 0.4% against the pound sterlingat 87.81 pence, while earned 0.2% against the dollar, at $1,079. For his part, he The yen is trading flat at around 132.41 units per dollar.
As for cryptocurrencies, the bitcoin It rose 0.44% to $28,276.58 but was below a nine-month high hit on Monday.
Source: Ambito
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