Dollar declines on cautious day ahead of Fed meeting By Investing.com

Investing.com – The US dollar fell in early European trade on Monday, but remains near six-month highs, as traders cautiously await several key interest rate decisions and losses from central banks this week, especially the Federal Reserve.

At 9:05 AM (CET), the .

The Fed will maintain its aggressive tone

The dollar fell slightly this Monday, although it maintained its fundamental strength, as the latest data from the United States pointed to a resilient economy, while it rose 0.6% monthly last month, its largest rise since June 2022, driven by rising interest rates. Gasoline prices.

He is expected to leave interest rates unchanged when he announces his latest decision on Wednesday, although he is also likely to maintain his aggressive stance, suggesting the possibility of raising rates at least once again this year.

“Inflation concerns remain and economic resilience suggests the Fed will continue to signal the possibility of an eventual rate hike, even if we don’t think it will go all the way,” ING (AS:) analysts wrote in a note.

Will the BoE signal the end of the gait cycle?

It also meets on Thursday and is likely to raise interest rates for the 15th time as inflation remains high despite the UK economy’s difficulties.

The pair rises to 1.2391 after learning that UK house sales prices rose slightly this month after a sharp decline in August, according to property website Rightmove.

However, the overall outlook for the economy looks very bleak, as Britain’s main manufacturing body on Monday cut the sector’s growth forecasts for this year and next, citing a sharp decline in industrial production and economic uncertainty.

This increases the chances that the Bank of England will end its interest rate hike cycle after the expected rise on Thursday.

The Bank of Japan meeting is the highlight of the event on Friday

The pair fell 0.1% to 147.64 ahead of the Bank of Japan’s meeting on Friday after Governor Kazuo Ueda last week raised speculation about an imminent shift away from his ultra-loose monetary policy.

While any rate hike is likely to provide some support to the yen, the currency is still suffering amid declining interest in carry trades and a widening gap between local and US interest rates.

The emergence of members of the European Central Bank

The pair rose 0.1% to 1.0660 as European Central Bank policymakers appeared on Monday.

Their statements will be scrutinized to determine the extent to which the group’s more hawkish members oppose signs of the end of the year-long interest rate hike cycle after the central bank raised key interest rates by 25 basis points last week to record historic levels. .