The dollar rose Monday, reclaiming some of the gains lost earlier in the month, at the start of a busy week of data releases and central bank rate meetings, including the Bank of England and, most importantly, the meeting of the US Federal Reserve.
The euro fell 0.36% to $ 0.9932, the British pound lost 0.67% to $ 1.1537, and the dollar rose 0.82% against the Japanese yen to 148.6, as the weakness of the US currency at the beginning of the month continued to fade.
The dollar is set to decline monthly in October – the first from May and only the second questyear – amid expectations that the Fed could signal a less aggressive future interest rate program at its policy meeting starting Tuesday. However, at the end of last week, this novel lost its luster.
Both the Australian and Canadian central banks hiked interest rates less than expected in their October meetings, and the markets read a pessimistic tone after last week’s European Central Bank meeting that hiked rates by 75 basis points.
The Fed is expected to raise rates by an additional 75 basis points at the conclusion of Wednesday’s meeting, which would be the fourth consecutive hike of this kind, but market price levels suggest there is only about a 50% chance of a rise. by 50 basis points At the December meeting.
Data released today showed that inflation in the Eurozone was higher than expected at 10.7%, a new all-time high.
Data was also released today showing Japan spent 6.3499 trillion yen ($ 42.8 billion) intervening in the foreign exchange market this month to support the yen.
On the other hand, the Chinese yuan fell after data showed that factory activity in the country unexpectedly declined in October, impacted by the slump in global demand and tight internal restrictions to fight the Corona virus.
The dollar was up 0.74% against the yuan, which was trading offshore at 7.32.
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