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Dollar steadies ahead of week for Fed speakers

News Date: 20/3/2017 03:27:40
 

The dollar stands on defensive position in Asian trading with the start of a new week. Bulls still take care tradings, after a tough week sends a les” hawkish” interest rate hike signs to the markets.

The G20 meeting over the weekend did not come out any new. The countries remained at their position on central bank currency intervention, but pledged to avoid trade protectionist policies.

Market participants are preparing for a week in which nine FOMC members will talk about monetary policy, including Janet Yellen, who is scheduled to speak on Thursday.

The Fed's cautious approach last week sent investors messages, including weak chances to raise benchmark interest rates at next meeting in May, with a 50% chance of another interest rate hike in June.

There is likely to be a pause for two months before the next announcement of Fed interest rate hike, which is enough time not to undermine the positive risks, so best scenario is  the stability of the US dollar in the short and medium term.

At 4:40 GMT, the US Dollar index fell 0.16% to trade at 99.92. A break below 100 will send the dollar into a deep wave of decline.

Political tensions are returning to the euro as we are waiting the first French presidential debate due later on Monday.polls showed that the rivalry between centrist party Emmanuel Macaron and far-right leader Marin Lupan would be strongest in the first round of elections on April 23. However, they also showed that Macron would comfortably win the on May 7

The EUR is inclined to rise 0.23% to trade around 1.07636 after Friday's high of 1.0782.

The euro is still supported by growing talks about the possibility of the ECB raising interest rates before end asset purchase program, and this is expected to have a positive impact on the euro in the upcoming period.

The pound has hovered around a two-week high, drawing strength from the recent vote by a member of the Monetary Policy Committee (Christine Forbes) to raise interest rates benchmark, which in turn gives sterling the strength to recover in the short term.

The pound has been trading since the morning at 1.2387 against the dollar

The US Dollar continued to decline against the Japanese Yen, after BOJ Governor Haruhiko Kuroda warned of the possibility of a rate cut as the Monetary Policy Committee continued trying to meet the inflation target of 2%, the Bank maintained its expansionary monetary policy as it is.

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