© Reuters.
By Peter Nurse
Investing.com – The dollar gains positions this Thursday, recovering from the losses of the previous day after the Federal Reserve said it was in no rush to raise interest rates after starting to reduce its bond buying program.
At 8:55 a.m. (CET), the, which follows the evolution of this currency against a basket of six other major currencies, rises 0.2% to 94.088, after the fall of almost 0.3% in the Wednesday.
Additionally, the pair is down 0.3% to 1.1577, reversing Wednesday’s gains, while the pair is up 0.2% to 114.25, not far from the multi-year highs of 114. 69 registered last month.
The Fed announced late Wednesday that it would cut its $ 120 billion bond purchase program initially by $ 15 billion, as expected, but President Jerome Powell said the US central bank would be “patient. “when deciding when to raise its overnight benchmark interest rates from levels close to zero.
The dollar weakened on Wednesday as traders called Powell’s remarks dovish, given that inflation is currently at 30-year highs, though it has since recovered.
“The fact that the dollar continues to trade near its recent highs against the euro and the yen should remind us that (a) the euro and the yen appear to be better funded currencies than the dollar and (b) that the Federal Reserve has given the starting gun for the normalization of monetary policy, which will end up causing an increase in liquidity in dollars, a rise in interest rates in the United States and what should be a strengthening of the dollar “, said the analyst ING (AS 🙂 in a note.
On the other hand, the pair fell 0.2% to the level of 1.3657, from the highs of the week of 1.3698 recorded early Thursday, as traders positioned themselves in anticipation of the meeting of monetary policy of the Bank of England that takes place in the course of this day.
Markets anticipate a rise in interest rates by the UK central bank due to rising inflation, which would mark the first rise in interest rates by the world’s leading central banks since the beginning of the Covid-19 virus pandemic. However, the decision is likely to be close, as economic growth is beginning to slow.
“The British pound has already corrected its course a bit this week and we suspect that it could have a little more travel if it appears that Governor Bailey does not win the vote of at least eight of the nine members of the Monetary Policy Committee in the vote on the rate hike of 15 basis points, “adds ING.
The pair rose 0.5% to the level of 3.9608, and it also advanced 0.1% to 4.5835, the day after Poland’s central bank raised its key interest rates by three-quarters of a century. percentage point, higher than expected, to try to combat rising inflation.
The pair points to a rise of 0.3%, to the level of 22.0000, while it falls 0.1%, to 25.4570, before the meeting of the Czech National Bank, in which a new rate hike.
The central bank implemented a 75 basis point hike in September, the highest since 1997, to combat rapid price growth, and is expected to do something similar this Thursday.
