Traders are debating whether a 25- or 50-basis-point cut will be made at the end of Wednesday’s meeting, but expect a 100-point reduction by December.
He global dollar fell in the early hours of Wednesday against the yen as investors adjusted their positions ahead of what is expected to be the first cut in benchmark interest rates by the United States Federal Reserve (Fed) in more than four years, and the beginning of the cycle of Flexibility in the monetary policy of that country.
Although the yields of the US Treasury bonds They went up, the dollar fell 0.3% against the yen to 141.92, shedding about a third of its gains from Tuesday, when unexpectedly strong U.S. retail sales data were taken as weakening the case for aggressive easing of the Fed. Against the euro, it fell to $1.1124, not far from the year’s low of $1.1201.
Amid widespread uncertainty among traders, the expectation is that even if this first cut turns out to be “moderate” – around 25 basis points – rates will have already been cut by more than 100 points by Christmas.
Meanwhile, the yen, which has risen more than 12% since July because the Bank of Japan (BoJ)which will decide on monetary policy on Friday, has been raising rates at the same time as the Fed is preparing to cut them. The Japanese currency rose by around 0.45% to 141.78 percent. dollar, recovering about a third of a fall at night.
Operators say the tone of the Fed, as well as the size of the rate cut, will determine the reaction in the exchange market: “A Federal Reserve expansionary policy that adopts a substantially easing stance should generally lead to a dollar more weak”, told Reuters Nathan Swami, Head of Foreign Exchange Operations Citi in Singapore. However, that attitude could end up spooking the markets if it seems to anticipate a deceleration of the economy more worrying than expected, and in that case risk-sensitive and emerging market currencies could face headwinds.
In Uruguay, the dollar again exceeded $41
In Uruguay, meanwhile, the dollar rose 0.26% compared to Monday and closed at 41.063 pesos, according to the exchange rate. Central Bank of Uruguay (BCU), so the US currency added its second consecutive day of gains and was close to its highest level of the year.
The greenback was quoted in this way in tune with what happened globally and in the local exchange market accumulates an increase of 1.80% so far this month, while the appreciation of the dollar reached 5.23% compared to the end of 2023.
Source: Ambito
I am Pierce Boyd, a driven and ambitious professional working in the news industry. I have been writing for 24 Hours Worlds for over five years, specializing in sports section coverage. During my tenure at the publication, I have built an impressive portfolio of articles that has earned me a reputation as an experienced journalist and content creator.
