In terms of expectations around Federal Reserve rates, markets have recently lowered their projections on the timing and magnitude of rate cuts this year.
He dollar moves this Tuesday without a clear trend, awaiting the release of crucial data that could shed more light on the direction of interest rates from the Federal Reserve United States. Simultaneously, the yen surges after figures confirmed that inflation in Japan exceeded the Bank of Japan’s target (BOXWOOD).
Core consumer inflation in Japan exceeds expectations, fueling speculation that the BOJ could end negative interest rates in April. As a result, the yen gained 0.35%, standing at 150.18 units per dollar, marking an increase since mid-February, when it reached 150.88 units, its highest level since November 16.
Dollar vs. other currencies
The dollar index, which measures the performance of the dollar against a basket of six major currencies, including the yen, euro and pound sterling, experienced a slight decrease of 0.05%standing at 103.71.
In terms of expectations around Federal Reserve rates, markets have recently lowered their projections on the timing and magnitude of rate cuts this year. This is because the US economy remains strong and inflationary pressures have not eased significantly.
The release of the personal consumption expenditure (PCE) index on Thursday will be one of the key data points of the week, offering possible indications of less aggressive bets on the Fed’s easing policy.
On the other hand, the euro shows an increase of 0.1% against the dollar, standing at 1.0859 dollars. This continued strengthening since mid-February reflects market confidence, as bets on future rate cuts by the European Central Bank were reduced to 90 basis points by the end of the year.
This comes amid encouraging signs from the economy, supporting expectations of a rebound in growth in the second half of 2024, according to analysts.
Source: Ambito
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