Although markets see little chance of the Federal Reserve cutting rates later this month, expectations for cuts in June decline slightly to 67%.
The euro also fell 0.05% against the dollar, standing at $1.0920.
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The index of the dollar remains stable this Wednesday, ignoring a dinflation rate in the United States which was higher than anticipated. Traders maintain their expectations of an interest rate cut by the Federal Reserve in June.
In February, the US Consumer Price Index (CPI) recorded a solid increase, exceeding forecasts and signaling some persistence in inflation. Although the CPI increases 0.4% in line with forecasts, The 3.2% year-on-year increase is slightly above the expected 3.1%, including underlying numbers that also exceed estimates.
Although markets see little chance of the Federal Reserve cutting rates later this month, expectations for cuts in June decline slightly to 67%, compared to 71% at the beginning of the week, according to the CME Group’s FedWatch tool. .
Dollar vs. other currencies
Thus, the dollar index, which measures the strength of the greenback against a basket of six currencies, registered an increase of 0.09% to 103.01. Sterling declines 0.05% to $1.2785despite the UK’s economic growth in January, ending a shallow recession in the second half of 2023.
The euro also fell 0.05% against the dollar, standing at $1.0920. The European Central Bank will later announce the outcome of discussions on the review of its operating framework, which has kept rates at zero or lower and injected liquidity into banks through bond purchases and loans.
Francois Villeroy de Galhau, head of monetary policy at the ECB, declared on Wednesday that the ECB will probably start cutting rates during the spring, between April and June 21, as “victory” against inflation is in sight .
On the other hand, The dollar gains 0.2% against the yen, reaching 147.98 yen, after the Japanese currency experienced its biggest fall in a month due to Bank of Japan Governor Kazuo Ueda’s slightly bleaker assessment of the economy on Tuesday.
Source: Ambito
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