© Reuters. US dollar banknotes in an illustration from the Reuters archive.
SINGAPORE (Reuters) – The dollar rose on Tuesday as investors reduced their bets on near-term cuts in interest rates by the Federal Reserve (the U.S. central bank) in the wake of hawkish comments from European Central Bank officials, while fears of further attacks raised… On ships in the Red Sea on the willingness to take risks.
It rose against a basket of currencies by 0.253 percent to 102.90 points, after rising 0.2 percent overnight in quiet trading during a public holiday in the United States on Monday.
It fell 0.3 percent to $1.09185, heading towards the largest percentage decline in one day in two weeks. It fell in the latest trading to $1.2681, down 0.36 percent during the day and away from the highest level in nearly five months at $1.2825, which it recorded in late December.
Comments from European Central Bank officials opposing early interest rate cuts have cast a shadow over the outlook for interest rates globally.
An official from the Yemeni Houthi movement said on Monday that the group would expand its targets in the Red Sea region to include American ships, and the Iran-allied group pledged to continue attacks after American and British strikes on its positions in Yemen.
A group of Federal Reserve officials are scheduled to speak this week, including Christopher Waller, a member of the central bank’s Board of Governors, who will deliver a speech on the economic outlook before the Brookings Institution later on Tuesday.
The CME Fed Watch tool showed that markets expect a 70 percent chance of the US Federal Reserve cutting interest rates by 25 basis points in March, compared to 77 percent the previous day and 63 percent the previous week, highlighting the changing expectations for interest rate cuts. .
However, traders expect cuts of more than 160 basis points this year, up from the 140 basis points expected last week.
The yen fell 0.20 percent to 146.07 per dollar after data showed that the producer price index remained flat in December compared to last year and slowed for the twelfth month in a row.
The data indicates that the rise in consumer price inflation will moderate in the coming months and will ease pressure on the Bank of Japan to phase out its massive stimulus programs soon.
Expectations of a shift in monetary policy by the Bank of Japan strengthened the yen towards the end of 2023, and the currency rose five percent against the dollar in December. It has since fallen sharply and is down three percent so far in January.
It fell 0.53 percent to $0.6625, while the New Zealand dollar fell 0.46 percent to $0.61715.
(Prepared by Mahmoud Reda Murad for the Arabic Bulletin)
2024-01-16 04:38:00
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