Global dollar remains near 10-week high on bet on moderate Fed rate cut

Global dollar remains near 10-week high on bet on moderate Fed rate cut

He global dollar remained near its highs in more than two months, sustaining the momentum that operators gave it by lowering their expectations that the Federal Reserve of United States (Fed) will make new cuts in interest rates at levels similar to those implemented in September. In Uruguay, Meanwhile, the currency remained lower for the third consecutive day.

He index dollar —which measures the performance of the greenback in relation to a basket of six other currencies of international relevance— stood at 103.16 units in the early hours of Friday; just below 103.36, the highest level since August 8 hit on Monday, after the governor of the Fed, Chris Waller, called for “more caution” on interest rates.

The review of prices Federal Reserve “has been the main driver of the rebound in dollar, especially in relative terms with other central banks,” he said Francesco Pesole, foreign exchange strategist ING, for whom “Waller’s comments have contributed to the strengthening of the dollar this week.”

This has been driven by a series of US data who have shown that the economy is resilient, while inflation in September rose slightly more than expected, prompting traders to trim bets on further major rate cuts by the Fed: They now attribute a nearly 90% probability of a 25 basis point cut in November, with 45 basis points of overall easing priced in for the year.

For his part, the euro remained on the defensive, hitting its lowest level since August 8 at $1.0885 ahead of the US policy meeting. European Central Bank (ECB) Thursday, where a consecutive cut in interest rates would be applied, a measure that seemed unlikely at its last meeting in September.

Meanwhile, the pound settled at $1.3079 after data from the british labor market show that wages grew at their slowest level in more than two years in the three months to August, a pace that should allow the Bank of England reduce interest rates next month.

He yen, It also strengthened slightly in early European trading to 149.29 per dollar, after falling to 149.98 on Monday, its weakest level since August 1. This month it has already dropped 3.7%.

Three days down in Uruguay

In Uruguay, meanwhile, the dollar fell 0.27% compared to Friday, closing at 41.424 pesos in the interbank price of the Central Bank of Uruguay (BCU), thus chaining three consecutive days of decline to continue its decline within the range of 41 pesos.

The US currency accumulates a monthly depreciation of 0.52% and an annual variation of 6.16%, since its price is 2.40 pesos above that registered after the closing of the last exchange day of last year .

Source: Ambito

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