The dollar American falls slightly this Monday, although it remains close to its highs of the last six months. This is due to the caution that traders show when making critical decisions about interest rates what will they take central banks in the coming days, especially the Federal Reserve.
The dollar index, which tracks its performance against a basket of six major currencies, is down slightly by 0.1% at 104.937, although not far from the highs reached last weekwhich were 105.43.
The latest US economic data suggests a resilient economy, with a monthly increase of 0.6% in inflation consumption last month, this being the largest increase since June 2022, driven mainly due to the increase in gasoline prices.
Dollar, Federal Reserve and interest rates
Everything seems to indicate that the Federal Reserve will maintain interest rates no changes at your next meeting and decision announcement, scheduled for Wednesday. Nevertheless, likely to reaffirm its cautious stancehinting at the possibility of at least one additional hike before the end of this year.
“Concerns about inflation persist and economic resilience suggests the Fed will continue to mention the possibility of a final hikealthough we are not convinced that it will really implement it,” ING (AS:INGA) analysts point out in their statement.
Will the Bank of England end the upward cycle of rates?
The meeting of the Bank of Englandwhich is expected to see interest rates rise for the 15th time as inflation remains high despite the economic challenges facing the UK.
The GBP/USD pair has risen to the level of 1.2391 after news that house sales prices in the United Kingdom have risen slightly this month, recovering from the sharp drop they experienced in August, according to reports from the real estate website Rightmove.
Nevertheless, The overall outlook for the economy looks pretty bleak.since the main body of the British manufacturing sector has revised downwards its growth forecasts for this year and next, citing a sharp decline in industrial production and growing economic uncertainty.
This increases the chances that the Bank of England ends its cycle of interest rate increases after the forecast rise this Thursday.
The highlight of the week will be the meeting of the Bank of Japan on Friday. The USD/JPY pair fell 0.1% to 147.64 ahead of this crucial meeting after Governor Kazuo Ueda fueled speculation last week about a possible change in policy. monetary policy, currently very lax.
Although a rise in interest rates is likely to provide some support for the yen, the Japanese currency continues to struggle due to declining interest in trading. carry trade and the growing gap between local and American interest rates.
Source: Ambito
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