Connect with us

Hi, what are you looking for?

Investing Ideas

Dollar Edges Higher; Fed in Focus After ECB Turns More Dovish

Forex1 hour ago (Jul 23, 2021 03:06AM ET)

(C) Reuters.

By Peter Nurse

Investing.com – The dollar pushed higher in early European trading Friday, with attention turning to next week’s Federal Reserve meeting after the European Central Bank’s dovish performance on Thursday.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 92.865, but still below Wednesday’s 3 1/2-month high of 93.194.

USD/JPY rose 0.1% to 110.28, GBP/USD fell 0.1% to 1.3754, despite retail sales rising 0.5% in July, more than expected, while the risk-sensitive AUD/USD fell 0.1% to 0.7370.

Additionally, EUR/USD was flat at 1.1770, having slipped during Thursday’s session after the ECB strengthened its forward guidance on interest rates, tying them more closely to inflation, suggesting an even longer period of steady or lower policy interest rates.

“The ECB’s Staff currently projects that inflation will reach just 1.5% by the very end of its horizon, which runs until 2023,” said analysts at ABN Amro, in a note. “In addition, the trajectory of inflation is very modestly upward sloping … This would be consistent with policy rates remaining where they are through 2024.”

There are a slew of surveys on the manufacturing and services sectors in both Europe and the U.S. later Friday, which are expected to show a slight softening of activity, albeit from high levels, but the market’s next major focus is likely to be the Federal Reserve’s policy meeting next week.

Coronavirus cases have started to rise again in the regions of the U.S. where there has been a low vaccination pickup since the previous meeting in mid-June, but the meeting is still expected to produce some advancement in the discussions for a tapering of stimulus.

Also of interest, the Bank of Russia meets later Friday and is expected to lift its benchmark interest rate as it struggles to combat surging inflation.

The central bank has already raised rates by 125 basis points this year. But with annual inflation at a five-year high of 6.5%, way above the 4% target, a further hike of as much as 100 basis points is likely.

At 2:55 AM ET, USD/RUB traded 0.4% lower at 73.744, with the ruble remaining one of the top four emerging-markets performers this year.

Dollar Edges Higher; Fed in Focus After ECB Turns More Dovish

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.

Uncategorized

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.

Uncategorized

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: Buzzclever.com it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved