© Reuters.
By Peter Nurse
Investing.com – The US dollar is hovering near five-week lows at the start of trading on Wednesday in Europe ahead of the latest Federal Reserve rate decision, while surprising data UK inflation boost sterling.
By 09:55 AM ET (0955 GMT), the , which tracks the currency against a basket of six other major currencies, was down 0.1% at 102.825, just above fresh five-week lows. at the beginning of the day.
The recovery in risk confidence throughout this week has weighed on the dollar, but the losses are smaller this Wednesday, as attention turns to the conclusion of the two-day Federal Reserve meeting.
Everything indicates that he will raise interest rates by 25 basis points, and a minority expect him to keep them unchanged.
Just a month earlier, the market was estimating a reasonable possibility of a 50 basis point rise, but the sudden bout of financial instability has complicated monetary policy decisions, which were heavily focused on raising interest rates to combat the .
The Fed meeting concludes with the release of a statement at 8:00 PM ET, followed half an hour later by a press conference from the Chairman.
Elsewhere, the pair is aiming for a 0.5% rise to 1.2270, near a six-week high, after inflation picked up again in the UK in February, increasing pressure on the currency. to continue raising interest rates despite the current financial instability.
The rose 1.1% for the month as a whole, well above the 0.6% forecast, which put the rate at 10.4% from 10.1% previously. Analysts had expected it to fall below 10% for the first time since August.
The Bank of England will announce its latest monetary policy decisions on Thursday, and these figures can only fuel the risk of a further rise in interest rates, which would be the eleventh in a row.
The pair rises to 1.0772, just below the five-week highs recorded overnight.
He raised interest rates by 50 basis points last week, and more hikes will be needed to fight back, Bundesbank president Joachim Nagel said in an interview with the Financial Times, published on Wednesday.
“Our fight against inflation is not over,” Nagel told the paper, adding that he certainly believed that “price pressures are strong and widespread across the economy.”
The pair is up 0.4% to 0.6694, benefiting from increased risk confidence, the is up 0.1% to 132.57, while the is up 0.1% up to 6.8911.