He dollar The US loses positions at the beginning of the trading day this Wednesday in Europe awaiting the conclusion of the two-day monetary policy meeting of the Federal Reserve and after some not very encouraging employment data.
The dollar index, which tracks the dollar against six other major currencies, fell 0.3% to 101.420. Traders appear to be taking a defensive stance as they wait for the Federal Reserve to announce its new monetary policyespecially after learning on Tuesday that job vacancies in the United States fell for the third straight month in March.
Everything points to the US central bank raising interest rates again this Wednesday, and the question is what will happen next.
In fact, heMarkets believe there will be rate cuts towards the end of the year, given signs of a weakening labor market, concerns about the health of the country’s smallest banks and uncertainty about the debt ceiling.
“Inflation remains ‘unacceptably high, but banking tensions are causing a tightening of lending terms, which will contribute more to the slowdown in the economy than Wednesday’s likely 25 basis point rise,’ analysts say from ING (AS:INGA) in a note.
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“Although the Federal Reserve will leave the door ajar to further hikes, the need for interest rate hikes is highly questionable. We expect rate cuts of 100 basis points before the end of the year.”
Elsewhere, EUR/USD is up 0.3% to the 1.1030 level, after rising 0.2% overnight and not far off the one-year highs recorded last week. last week at 1.1096.
Data on Tuesday showed core eurozone price growth unexpectedly slowed, but this is unlikely to stop the European Central Bank from raising interest rates again this week as inflation remains too high.
Economists polled by Reuters expect a rise of 25 basis points to 3.25%, but Isabel Schnabel, a member of the ECB Council, declared last week that a rise of 50 basis points is not ruled out.
GBP/USD rises 0.3% to the 1.2504 level, and the Bank of England is expected to tighten monetary policy next week as well, as inflation remains very high.
USD/JPY is down 0.4% to 135.93, recovering from near two-month lows as fears of a US banking crisis have fueled safe-haven demand, while AUD/USD added 0.1% to 0.6667, extending gains after the Reserve Bank of Australia’s unexpected rate hike earlier this week.
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