Around 8:20 p.m., the dollar lost 0.12% to 1.0225 dollars for one euro, while the Dollar Index, which compares the greenback to the main other currencies, dropped 0.24% to 106.47 points.
The dollar retreated slightly on Monday once morest the euro and other major currencies in a cautious market, turning its attention to the meeting of the US central bank (Fed) on Tuesday and Wednesday.
Around 6:20 p.m. GMT, the dollar lost 0.12% to 1.0225 dollars for one euro, while the Dollar Index, which compares the greenback to the main other currencies, dropped 0.24% to 106.47 points.
“The greenback remained nearly flat as markets cautiously position themselves for the Fed’s Currency Committee meeting,” said Shaun Osborne, chief foreign exchange strategist at Scotiabank.
Same story at ActivTrades, where Ricardo Evangelista pointed out that “the dollar started the week without much movement, which reflects that investors are no longer hesitating and are banking on a 75 basis point hike” in Federal Reserve rates. (Fed). The central bank’s decision will be made on Wednesday.
Some market players had raised the possibility of an increase of 100 points, or a percentage point, which had helped to plunge the euro below the parity threshold with the dollar.
But since then, “a series of not very encouraging data on the American economy have shaken the market’s confidence in the will of the Fed to continue raising its rates for a very long time”, commented Jane Foley, analyst at Rabobank.
“The market seems more and more convinced that rates will peak at the end of 2022 rather than in 2023”, adds Kit Juckes, analyst at Societe Generale.
It is increasingly difficult to predict the action of central banks, noted however several analysts: at its previous meeting, the Fed raised its rates by 75 basis points, a scenario which had not been reported to the press. financial only a few days before his decision.
The European Central Bank (ECB) last week hiked rates by 50 points, following promising a 25-point hike, and said it would now make its decisions at each meeting on a case-by-case basis.
“These actions have made forward-looking indications relics of an ancient past,” said John Velis of BNY Mellon, who believes that volatility will therefore increase in the bond and foreign exchange markets.
