He dollar rose on Monday after the president of the Federal Reserve (Fed), Jerome Powelltook a more hawkish tone on the economy, prompting traders to reduce bets that the U.S. central bank will cut rates again by 50 basis points at its next meeting.
Powell said recent revisions to data on economic growth, savings rates and personal income had removed some “downside risks” that the Fed had focused on.
He also said he sees two more interest rate cuts, totaling 50 basis points this year “if the economy performs as expected,” and warned that it will likely be several years before utility inflation home cools to desirable levels.
This Monday, the dollar index It rose 0.42% and stood at 100.86. He euro fell 0.34% to $1.1125, while the greenback gained 1.17% to $143.85 japanese yen.
Growth hopes in China
On the other hand, the Australian and New Zealand dollars hit 2024 highs as rate cuts and expectations for fiscal support in China They raised hopes for an improvement in the slowing economy and boosted gains in Chinese markets and anything exposed to China’s growth.
He Australian dollar hit a 20-month high of $0.6941, and the New Zealand dollar rose to $0.6375, its highest level in 14 and a half months.
Both units gained ground against European currencies, with the euro falling to A$1.6082, its lowest level against the Australian dollar since mid-July.
He japanese yen was also in the center of attention since Shigeru Ishiba -former minister of Defense and former critic of aggressively flexible politics – who last week won the leadership of the ruler Liberal Democratic Party He said he would call general elections for October 27.
He yen rose on Friday and hit a one-week high of 141.65 per dollar in Asian hours, but further moves were limited as Ishiba told public broadcaster NHK that from the government’s point of view, policy should remain accommodative as a trend, given economic conditions.
Analysts said that was enough to halt the yen’s sharp rise following his victory and that an early election could weigh on the yen at least in the short term.
“An election basically leaves the Bank of Japan out of the equation until December… a marginally negative yen,” said Ray Attrill, head of currency strategy at National Australia Bank. The dollar rose 0.17% to 142.45 yen.
The series of stimulus measures Beijing They fueled a rally in the Chinese yuan last week, even as interest rates were cut, as investors flocked to Chinese stocks, which posted their best week in a decade. The yuan broke the psychological mark of 7 to the dollar in offshore trading on Friday, although it hovered around 7.0125 in onshore trading on Monday.
The pound sterling stayed out of most of the drama, rising 0.2% against the dollar to $1.3402 and the Swiss franc weakened, with the euro rising 0.65% to 0.9439 francs and the dollar a 0.3% higher at 0.8429.
Source: Ambito
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