By Peter Nurse
Investing.com – The dollar remains practically flat this Wednesday, taking a breather after recent and succulent gains before the publication of the minutes of the Federal Reserve meeting that sanctioned the tapering of the bank’s emergency bond purchase program central.
At 8:55 a.m. (CET), the, which tracks the evolution of this currency against a basket of six other major currencies, remains flat at 96.483, just at the levels last recorded in June 2020.
The pair is down 0.2% to the 114.91 level, just below the new four-and-a-half-year highs recorded at 115.24. The rises 0.1% to 1.3385, the remains flat at 1.1246 and the falls 0.1% to the 0.7219 level.
The dollar has been on a roaring run of late, hitting 2021 highs as traders are confident that the Federal Reserve will raise interest rates earlier than expected, and certainly earlier than most of its major counterparts, in response to the surges. inflationary pressures.
In addition, he received a boost on Tuesday with the reappointment of Jerome Powell to remain at the helm of the central bank, as he is perceived to be more likely to respond more quickly to high prices than Lael Brainard, who was also running for the job.
Powell’s reappointment “sparked another round of dollar purchases, as the risk that the more pessimistic Lael Brainard would take over was ruled out (she was appointed vice president, however) and markets strengthened their views on a first rise. from the Fed in mid-2022, “ING (AS 🙂 analysts say in a note.
The yield on US Treasuries fell early this Wednesday, but increased by more than 5 basis points to 1.68%, while the yield on 30-year bonds gained 6 basis points. The yield on two-year US Treasuries is also declining, after posting its highest level since March 2020.
Attention will focus this Wednesday on a series of economic data, ahead of the Thanksgiving holiday on Thursday, including the last reading for the third quarter, those for October and the weekly data from.
However, the focus will be on those of the Fed meeting in November, in which the reduction of the central bank bond purchase program started at the beginning of the pandemic was approved. Investors will be looking for clues as to whether the pace of this reduction could accelerate, potentially bringing forward the date of the first interest rate hike. The publication of the price index for personal consumption expenditure at 4:00 p.m. (CET) will be interpreted in this sense.
On the other hand, the pair is left 0.6% to the level of 0.6908, despite the fact that he raised his interest rate to 0.75% and increased his forecast of long-term interest rates in 50 basis points.
Investors expected a higher rise and a higher forecast of the long-term cash rate from the central bank, causing the New Zealand dollar to fall sharply.
The pair rises 0.7% to 12.9145, and the Turkish lira remains under pressure after the pair soared more than 10% on Tuesday, after President Tayyip Erdogan defended recent rate cuts. and promised to win his “war of economic independence.”