The dollar held just below multi-decade peaks
The dollar held just below multi-decade peaks
On Tuesday, the dollar stayed slightly below multi-decade highs as traders expected a rate hike from the United States Federal Reserve but pondered whether signs of a slowing economy would trigger a change away from the Fed’s focus on inflation.
Walmart’s earnings warning on Monday, which stated that customers were tightening their belts, was the latest evidence that the going is becoming difficult, following numerous softer-than-expected data prints in the United States and Europe.
Small gains were made by the Australian and New Zealand dollars. The Australian dollar touched a one-month high of $0.6984 and last traded at $0.6970, breaking above its 50-day moving average as traders awaited the publication of inflation data on Wednesday.
Consumer prices are expected to rise by 6.2 percent year on year, the fastest rate over three decades.
Currencies
The euro advanced 0.21 percent to $1.0240 but was hampered by concerns over Europe’s energy security, exacerbated by a planned drop in Russian gas exports to Europe.
The yen remained stable at 136.43 per dollar.
On Wednesday, the Fed concludes a two-day meeting. Traders have been lowering their expectations as markets try to figure out if and when officials will stop fighting inflation amid evidence that the economy is slowing.
The US dollar index was marginally down at 106.270, but not far from a 20-year high of 109.290 achieved in mid-July, as the greenback gains strength from forecasts of rate hikes in the United States and as a safe bet in a global slowdown.
The Bank of England is also expected to raise interest rates by 50 basis points next week, albeit this will provide little help to the pound. The pound rose 0.2 percent to $1.2075 on Tuesday.
In other news, cryptocurrencies reversed last week’s gains. Bitcoin was trading at $21,100, its lowest level since July 18. Ether has also dropped to its lowest since July 18 at $1,421.
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