The market this week ushered in the decision-making meetings of the world’s major central banks, among which the US Federal Reserve (Fed) is the most watched. The U.S. dollar index fluctuated on Monday (19th), and worries about a sharp interest rate hike once drove Bitcoin below $19,000.
In late New York trade, the ICE U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, was down 0.19% at 109.55. DXY once again rose above 110 during the session, and has surged nearly 15% so far this year, on track for its best annual performance in 38 years.
Markets were generally thin as markets in the UK and Japan were closed on Monday. Global equities are on a tight leash, while the dollar remains solid on expectations the Fed will maintain aggressive tightening until next year.
Fed funds futures markets are pricing in an 81 percent chance of a three-yard hike this week and a 19 percent chance of a four-yard hike, Refinitiv data showed.
Amo Sahota, executive director of Klarity FX, said: “Is the dollar going to strengthen further ahead of the FOMC meeting? I think the market will pull back a bit here and do some consolidation.”
In addition to the Japanese and British stocks on Monday, global markets have ushered in several holidays this week. Australian stocks will be closed for one day on Thursday, and Japanese stocks will be closed again on Friday due to Respect for the Aged Day, which may reduce market liquidity and cause price volatility. .
Elsewhere, the euro edged up 0.1% to $1.0025, while the pound was up 0.1% at $1.1429, still hovering near a 37-year low.
The New Zealand dollar fell 0.47% to 0.5957 to the US dollar, hitting its lowest point since May 2020 during the session; the Australian dollar edged up 0.13% to US$0.6727 against the US dollar; the Canadian dollar fell to a nearly 2-year low against the US dollar and turned red in late trading It was up slightly at C$1.3251.
The yen edged down 0.2% to 143.18 yen against the dollar, with the yen hovering around the 145 resistance point after officials made hawkish comments on currency intervention.
The Bank of Japan will announce its interest rate decision on Thursday. The market is widely expected to maintain an ultra-loose monetary policy. However, given that the Bank of Japan has recently withdrawn its argument that “inflation rise is only a temporary phenomenon”, the policy turning point may come sooner than originally expected.
The yuan closed at a fresh 26-month low on Monday and depreciated below the key psychological level of 7.
Jitters over rising interest rates hit cryptocurrencies, with bitcoin dipping below the $19,000 mark to a 3-month low on Monday, recovering slightly at $19,498 by press time; ether rebounded from a 2-month low, up 3% to $1,371 Dollar.
As of Tuesday (20th) Taiwan time about 6:00 Price:
The dollar index was at 109.5925. -0.0704% The euro against the US dollar (EUR/USD) was quoted at $1.0025 per euro. +0.0999% GBP/USD (GBP/USD) was quoted at $1.1432. +0.1138% The Australian dollar against the US dollar (AUD/USD) was quoted at 1 AUD=0.6727. +0.1340% The US dollar against the Canadian dollar (USD/CAD) was quoted at 1.3248 Canadian dollars per US dollar. -0.1056% The U.S. dollar was quoted at 143.21 yen against the Japanese yen (USD/JPY). +0.2099%