Foreign Exchange Market Updates: Dollar Gains Against Major Currencies and Expectations for Monetary Policy Shifts

2024-01-09 21:50:08

Around 9:35 p.m. GMT, the greenback gained 0.18% once morest the single currency, to 1.0931 dollars per euro. It also recovered once morest the pound sterling (+0.30%) and the yen (+0.16%).

Operators now assign a probability of more than a third (34%) to the scenario of a monetary status quo from the Fed at least until May, whereas only a week ago they were betting at almost 80 % on a first drop from March.

“We believe that market forecasts still need to adjust significantly,” says Win Thin of Brown Brothers Harriman in a note, who sees a possible catalyst in Thursday’s publication of the CPI price index. to consumption in the United States in December.

Economists are therefore counting on a slight rebound in inflation in December.

Against the dollar, the euro also suffered from a poor indicator, according to which industrial production in Germany contracted once more (-0.7%) in November, while economists saw it growing. (+0.2%).

For Nicholas Cawley, of DailyFX, the euro/dollar parity evolves “within a narrow margin” depending on the indicators. “Macroeconomic data plays a central role at the moment,” according to the analyst.

“The market is trying to find a balance between rate forecasts, indicators and ordinary flows” on the foreign exchange market, explains the analyst.

The movements are clearer for emerging currencies, which suffer from changes in expectations regarding the monetary policy of the major central banks.

Thus, while currency traders are moderating their hopes of repeated rate cuts this year in the most advanced economies, certain countries have already started the maneuver, notably Brazil, Poland and Hungary.

In this context, the Polish zloty and the Hungarian forint fell on Tuesday once morest the “greenback”, one of the nicknames of the dollar, as did the Mexican peso, with operators anticipating a rate reduction at the next Bank meeting. central Mexico (Banxico), February 8.

Tuesday price Monday price 9:35 p.m. GMT 10:00 p.m. GMT EUR/USD 1.0931 1.0950 EUR/JPY 157.91 157.94 EUR/CHF 0.9318 0.9286 EUR/GBP 0.8599 0.8589 USD/JPY 144 .47 144.23 USD/CHF 0.8527 0.8480 GBP/USD 1.2710 1.2748
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