In a week packed with economic data that will be key signals, traders are debating between 25 and 50 basis point cuts.
He global dollar rose to a two-week high as investors grew cautious about the size of the first interest rate cut by the Fed. Federal Reserve (Fed)which is expected in the middle of this month, at the meeting of the Federal Open Market Committee (FOMC). In Uruguay, Meanwhile, the currency opened the month lower, although it remains in the 40 peso range.
Operators are waiting for what the survey reveals ISM about manufacturing activity of USA determine and so that it can influence the decisions of the Fed on how many points to cut interest rates, which will also be influenced by the employment data to be published on Friday. The debate is on whether the first cut will be 25 or 50 basis points.
This led to the dollar index —which measures the performance of the greenback against a basket of six other major international currencies— rose by more than 0.15%, exceeding 101.80 units, after falling by 2.2% in August due to expectations of rate cuts in the United States.
Markets are pricing in a 69% chance of a 25 basis point cut when the Fed meets on Sept. 17-18, with a 31% chance of a 50 bp cut, the tool showed. CME FedWatch.
Payrolls will be a determining factor in the evolution of the exchange rate, especially considering the support for lowering rates by the president of the Fed, Jerome Powell, was due to concerns about a weakening labour market.
Before then, Wednesday’s job openings data and Thursday’s jobless claims report will be in focus.
Meanwhile, the yen snapped a four-day losing streak against the dollar after press reports quoted the governor of Bank of Japan reiterating in a paper presented to a government panel on Tuesday that the central bank would continue to raise interest rates if the economy and inflation performed well, as policymakers currently expect.
September opened lower in Uruguay
Meanwhile, in Uruguay, he dollar fell 0.10% compared to Friday, closing at 40.296 pesos in the interbank quote. Central Bank (BCU), opening the month on the downside, although continuing its operations within the 40 pesos range.
The US currency has accumulated an annual variation of 3.26%, since its price is 1.27 pesos above the one registered after the closing of the last exchange day of last year.
Source: Ambito
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