Home Business News Dollar weakened before Fed meeting; Risk sentiment climbed according to Investor.com

Dollar weakened before Fed meeting; Risk sentiment climbed according to Investor.com

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By Peter Nurse

Investment.com – The dollar weakened early in European trading on Monday, with increased risk sentiment as economic data points to a global economic recovery ahead of a Federal Reserve meeting this week.

At 2:55 am ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, is 0.1% lower at 90,778, close to a level not seen since the end of the month. Two.

0.1% lower at 107.81, trading up 0.1% at 1.2100, near a two-month high, up 0.3% to 1.3914, while sensitive to risk increased by 0.3% to 0.7769.

The risky appetite was fueled last weekend by strong signs of global economic improvement, hurting the safe-haven dollar, with manufacturing activity indicators earlier in the month. 4, was announced last week, hit a record high in the United States and also showed impressive improvement in Europe.

A survey from Germany to be conducted later on Monday is expected to show business conditions continue to improve in Europe’s largest economy.

Attention this week will focus on the latest policy setting meeting, with the two-day meeting scheduled to close on Wednesday.

The European Central Bank maintained its very consistent policies last week, with President Christine Lagarde rejecting expectations that the central bank would soon consider reducing its bond purchases any more. when.

Federal Reserve Chairman Jerome Powell is likely to face questions about whether the labor market is improving and whether the rising coronavirus vaccination guarantees a monetary easing retreat, but he will probably take a very similar view to Lagarde, avoiding talking about reducing bond purchases.

Analysts at Nordea said in a note: “The Fed is unlikely to shake the descending boat on Wednesday, but” we continue to lean toward higher USD rates, stronger dollar and overflowing. Negative negative on risky assets in Q3. We think the decision on a rate cut will be made in September and continue to look for a rate hike from the Fed in the first half of 2022. “.

Elsewhere, up 0.9% to 8,4471, with traders watching wary of the Turkish lira to see if the pair tests an all-time high of 8, 58 in the context of deteriorating relations with the United States and after the new central bank director signaled that the rate skyrocketing would harm the economy.

The lira has fallen 3.5% in the last three trading days amid reports that US President Joe Biden would recognize the 1915 Armenian massacres in the Ottoman Empire as a genocidal crime, which will strain relations between NATO allies.

dropped 0.3% to 74,794, as Russia de-escalated tensions on its border with Ukraine and after its central bank raised its prime rate to 5% on Friday, from 4.5%, in one efforts to prevent rapid inflation.

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