London (awp/afp) – The dollar fell against the euro, pound and franc on Tuesday as the market priced in a pause in the US Federal Reserve’s rate hike cycle, ahead of the release of key figures on the inflation in the United States.
Around 11:30 a.m., the dollar lost 0.45% against the euro, at 1.0806 dollars for one euro, and 0.48% against the pound, at 1.2569 dollars for one pound and 0.30% against the franc at 0.9062 dollars for one franc.
“All eyes will be on the latest US inflation report” released midday at 12:30 GMT, said FXTM analyst Lukman Otunuga, “which is expected to slow again in May after a slight dip in April.” Investors should pay particular attention to the report on the eve of the US Federal Reserve (Fed) monetary policy decision after a two-day meeting.
“Signs of easing inflationary pressures could bolster expectations about the end” of the Fed’s rate hike cycle, Otunuga said. Conversely, a higher than expected inflation rate could encourage the central bank “to keep US rates higher for longer”, he continues.
After ten consecutive rate hikes, investors widely expect the monetary institution to decide not to raise its main key rate in June. If a break is therefore “almost certain”, “the tone and substance of the announcement will have a real weight from the point of view of the markets”, advance Ricardo Evangelista, analyst at ActivTrades.
At the same time, the pound sterling benefited from better than expected employment figures in the United Kingdom, which could give more leeway to the Bank of England (BoE) to continue its rate hikes to fight against inflation. The jobless rate fell slightly in the UK to 3.8% at the end of April, from 3.9% in the three months to the end of March.
The European Central Bank (ECB) will meet on Thursday, the Bank of Japan (BoJ) on Friday and the BoE next week for their monetary policy decision.
Tuesday class Monday class
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09:30 GMT 9:00 PM GMT
EUR/USD 1,0806 1,0757
EUR/JPY 150.76 150.18
EUR/CHF 0.9782 0.9778
EUR/GBP 0,8597 0,8599
USD/JPY 139,51 139,60
USD/CHF 0,9052 0,9090
GBP/USD 1,2569 1,2509
afp/vj
2023-06-13 09:58:03
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