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By Peter Nurse
Investing.com – The dollar loses positions at the beginning of the trading day in Europe this Wednesday, in a context of calm before the meeting of the Federal Reserve next week, while the UK budgets put the Pound sterling in the spotlight.
At 8:30 am (CET), the, which tracks the evolution of this currency against a basket of six other major currencies, fell 0.1% to 93.892.
He is down 0.1% to the level of 114.03, he rises 0.1% to 1.1603, while the falls slightly to 1.3763, while waiting to know the annual budgets of the United Kingdom .
The Federal Reserve has entered its suspension period prior to next week’s monetary policy meeting, and before that traders turn their attention to releasing a number of important data.
This Wednesday, those for September are published, but the third quarter on Thursday and September on Friday are the most anticipated data.
On the other hand, the pair rose 0.2%, to the level of 0.7513, after Australia’s core inflation rose at its fastest annual rate since 2015, prompting traders to assess the possibility of let interest rates go up sooner.
The general consumer price index rose 0.8% in the third quarter and 3.0% for the year as a whole, as expected, but the annual measure of core inflation accelerated to 2.1 %, well above the 1.8% expected and back in the Reserve Bank of Australia’s 2% to 3% target range for the first time in six years.
The British pound could be vulnerable on Wednesday when UK Chancellor of the Exchequer Rishi Sunak presents his annual budgets.
Much of the statements prior to this event suggest that Sunak will loosen the portfolio, after knowing that he is willing to end the public sector wage freeze, but the Minister of Finance will still have to juggle the budgets of this anus. If you are overly generous you run the risk of causing further inflation, as the Bank of England is already looking into tightening monetary policy, but if you fall short you risk strangling an already faltering recovery.
“The pre-budget leaks tend to refer to new spending plans rather than how they are going to be financed. This may leave the British pound somewhat vulnerable tomorrow if the British chancellor announces some kind of fiscal consolidation,” they explain ING (AS 🙂 analysts in a note.
The pair barely registered variations and remained at the level of 1.2391 before the last monetary policy meeting of the Bank of Canada. The central bank is expected to again cut its weekly government bond purchase program for the fourth time in the past 12 months, paving the way for interest rate hikes next year.
