Dollar Up, Investors Wait for Latest Fed Policy Decision By

Dollar Up, Investors Wait for Latest Fed Policy Decision

© Reuters

By Gina Lee – The dollar was up on Monday morning in Asia, with the U.S. Federal Reserve’s latest policy decision due later in the week.

The that tracks the greenback against a basket of other currencies inched down 0.10% to 95.735 by 12:11 AM ET (5:11 AM GMT).

The pair was up 0.23% to 113.94.

The pair inched down 0.07% to 0.7178 and the pair inched down 0.02% to 0.6719.

The pair inched down 0.10% to 6.3326 while the pair inched up 0.01% to 1.3555.

“The Fed has got markets by the leash. And this week, it will once more tug and yank,” HSBC co-head of Asian economics research Frederic Neumann said in a note.

A key driver currently driving the currency markets is when and how quickly central banks will hike interest rates and begin asset tapering.

“What will prompt investors to scurry about will be the guidance Chair Powell might give at his press conference about quantitative tightening later in 2022,” said Neumann’s note, which added that he does not expect a policy change.

The Fed will hand down its policy decision on Wednesday, with some investors starting to speculate that it is possible, although unlikely, that the central bank will hike interest rates for the first time since early 2020.

“We consider the higher risk is the Fed’s statement portrays an urgency to act soon, likely in March 2022, in the face of very high inflation. The urgency could culminate in a decision to abruptly stop quantitative easing (QE) by mid-February,” Commonwealth Bank of Australia analysts said in a note.

“A bullish statement and/or a faster end to the QE program could even encourage markets to price a risk of a 50bp rate hike in March,” the note added, with the analysts predicting this would lead to a knee-jerk reaction higher in the dollar.

Investors also await the policy decision, due to be handed down just ahead of the Fed’s. In Asia Pacific, Australia releases its consumer price index on Tuesday which will guide the Reserve Bank of Australia’s stance in its policy decision to be handed down in February.

In cryptocurrencies, bitcoin traded at $36,026, after tumbling 10% on Friday and dropping as low as $34,000 on Saturday. Institutional investors’ increased exposure to cryptocurrencies means that their moves are more closely correlated with other risk assets, some investors warned.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Share on facebook
Share on twitter
Share on linkedin
0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x

Get Registered For FREE Forex Training!

Fill In Your Details To Get Registered For FREE Forex Training!

Do You Know About Forex Trading?(Required)
Have you done Forex Trading before?(Required)
Where did you hear about us?(Required)