© Reuters.
By Peter Nurse
Investing.com – The dollar hits a seven-week low at the start of trading on Thursday in Europe after the Federal Reserve’s latest rate hike, while the pound gains ahead of the Bank’s meeting from England.
By 10:05 AM ET (0505 GMT), the , which tracks the currency against a basket of six other major currencies, was down 0.2% at 101.763, just above levels last seen at beginning of February.
The UK has raised its benchmark interest rates by 25 basis points, as expected, although it has taken a more cautious stance on future moves, hinting that it may pause interest rate hikes in the wake of the turbulence in the banking sector.
The US central bank has also cut its average forecast for real GDP growth this year from 0.5% to 0.4%, suggesting that the banking crisis is already having an impact on economic activity, albeit to a limited extent. the moment.
The Federal Reserve has raised official interest rates 25 basis points, but has signaled that it “may” only raise them one more time. This denotes a somewhat more dovish stance than expected, although the Fed does not believe that the recent banking problems will derail the economy much,” ING (AS:) analysts said in a note.
“We are more cautious and fear that a tightening of credit conditions will fuel the chances of a hard landing for the economy.”
On the other hand, the pair points to a rise of 0.4% to the level of 1.2313, near the maximum of seven weeks, before the monetary policy meeting of .
Bank of England Governor Andrew Bailey hinted earlier this month that policymakers might be considering a pause in their rate hike cycle, but the latest UK inflation data makes this sound like little. likely.
The UK index rose to 10.4% in February from 10.1% in January, well above expectations and almost back to December levels.
The pair rises 0.4% to the 1.0901 level, near seven-week highs.
He raised interest rates by 50 basis points last week, and more hikes seem likely even as the Federal Reserve doubts its next move.
“We have to control inflation and continue working until we are certain that the backbone of inflation has been broken,” Madis Müller, a member of the Governing Council, explained in an interview on Thursday, adding that the bulk of of the adjustment had probably already been made.
The pair fell 0.2%, to 0.9162, as everything indicates that he will raise rates this Thursday by 50 basis points, to 1.5%, since he considers that the fight against is more important than the concern about the turmoil in the financial markets.
The pair is up 0.8% to 0.6737, the is down 0.4% at 130.88 and the pair is down 0.8% at 6.8278, with these Asian currencies benefiting from the prospect of a Federal Reserve less aggressive.
