By Peter Nurse
Investing.com – The US dollar gains ground on Monday, holding in a tight range ahead of Federal Reserve Chairman Jerome Powell’s appearance later today, just days after the US central bank start your adjustment cycle.
At 9:00 AM ET, the , which tracks this currency against a basket of six other major currencies, is up slightly to 98.263.
It raised its key interest rates by 25 basis points last week for the first time since the pandemic. This is expected to be the start of an aggressive tightening cycle given rising inflation, so traders will be looking for clues as to the speed and size of future rate hikes.
Fed Chairman Jerome Powell will speak on economic forecasts at the annual conference of the National Association for Business Economics, before a series of appearances by other Fed members throughout the week, including Powell himself who will return to offer their statements on Wednesday.
“There is one camp that argues that the dollar tends to sell off in the first six months of a Fed tightening cycle, presumably with the ‘buy on the rumour, sell on the news’ mentality of a well-announced tightening cycle. “, say analysts at ING (AS:) in a note. “What is different this time around, in our view, is the aggressive early tightening the Fed is about to undertake and the events in Ukraine, which have weighed on Europe’s growth prospects and will weigh on the region’s currencies as well.”
The pair is down 0.1% to the 1.1051 level, and the is down 0.2% to 1.3160, with both currencies weighed on expectations of weaker European economic growth while the Ukraine war lasts, raising energy costs.
That said, in the short term, this week’s appearances by several policy makers from the , including President Christine Lagarde, could influence the fate of the euro in particular.
The pair rises to the 119.22 level, not too far from Friday’s six-year high of 119.39. The yen has come under heavy pressure against the dollar, down 1.6% in the past week, as the spread between US and Japanese interest rates widens.
He announced on Friday that he will keep his easing policy unchanged, which contrasts with the Federal Reserve’s rate hike the previous Wednesday.
He was down 0.3% to 0.7392, after rising sharply on rising commodity prices, while he was down 0.1% to 0.6895.
The pair rose 0.3% to 105.0994 as fighting continues in Ukraine, especially around the southeastern city of Mariupol, and as Ukraine rejects Russian demands that its forces lay down their arms. and leave the city.