Tags: Forex Market
Dollar, forex market

Dollar Edges Lower

In early European trade Wednesday, the dollar slipped lower in quiet trading ahead of next week’s Federal Reserve meeting. At the same time, the United Kingdom’s budget puts sterling in focus.

The Dollar Index, which measures the value of the US currency against a basket of six other currencies, was 0.1 percent lower at 93.892.

USD/JPY fell 0.1 percent to 114.03. EUR/USD rose 0.1 percent to 1.1603. GBP/USD fell slightly to 1.3763 ahead of Britain’s yearly budget.

The Federal Reserve has officially entered a blackout period ahead of next week’s policy-setting meeting, and traders are now focusing on a succession of significant data releases. The 3Q GDP announcement on Thursday and the September core PCE deflator on Friday will garner the most interest.

In other news, the Australian dollar jumped 0.2 percent to 0.7513 after core inflation in Australia surged at its most robust annual rate since 2015, causing traders to price in quicker interest rate hikes.


Risks Sparking More Inflation


As forecast, the Still, the annual measure of core inflation accelerated to 2.1 percent. It is well above 1.8 percent and returning it to the RBA’s target range of 2 percent to 3 percent for the first time in six years.

Sterling may be susceptible on Wednesday, when the United Kingdom’s Chancellor of the Exchequer, Rishi Sunak, releases his yearly budget.

Much of the debate leading up to this set piece has centered on Sunak relaxing the purse strings, following revelations that he is about to end the public sector wage freeze. However, the Chancellor still faces a tricky balancing act in this year’s budget. The Bank of England is already considering tightening its monetary policy. It is too much generosity risks fueling higher inflation. Meanwhile, too few risks are strangling an already shaky economy.

“Pre-budget leaks have often included additional expenditure plans rather than how this will pay for. Before the Bank of Canada’s next policy-setting meeting later this session, the USD/CAD traded relatively steady at 1.2391. The central bank is poised to lower its weekly government bond purchases once more, marking the fourth time in the last year that the central bank has scaled back its program, opening the way for interest rate hikes to begin next year.

User Review
0 (0 votes)


Leave a Reply


Share this on

Share on facebook
Share on twitter
Share on linkedin

Rec­om­mended for You

Subscribe to Our Newsletters

Have The Best Of Trade Market News Delivered Directly To Your
Mailbox. Subscribe To Receive The Latest Market News.