Home NewsForex Market News The European Central Bank’s hawk DXY pressured the euro to strengthen | Anue tycoon

The European Central Bank’s hawk DXY pressured the euro to strengthen | Anue tycoon

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The European Central Bank’s hawk DXY pressured the euro to strengthen | Anue tycoon

The European Central Bank released hawkish remarks, the US dollar index (DXY) fell on Monday (23rd), weakening for four consecutive trading days, and the euro strengthened.

The Federal Reserve’s interest rate meeting is coming next week. Wall Street Journal reporter Nick Timiraos, known as the “Fed’s megaphone,” recently pointed out that the Fed will try to slow down the pace of interest rate hikes and discuss the conditions for pausing interest rate hikes this year. U.S. Treasury Secretary Janet Yellen said on Monday she believed inflation was falling overall and the U.S. labor market remained very tight.

At present, the market has almost ruled out any possibility that the Federal Reserve will raise interest rates by 2 yards next month, and has lowered the terminal interest rate expectation to around 4.75% to 5.0%, although the Fed expects the terminal interest rate to rise above 5%.

In late New York trade, the ICE U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, was up 0.8% at about 102.

Convera senior market analyst Joe Manimbo pointed out that at least in the current cycle, the market believes that the Fed’s most hawkish days are over. Investors bet that the Fed will raise interest rates slower than other major central banks, and the dollar index is relatively at a disadvantage.

Ray Attrill, head of FX strategy at NAB, said that if the recent US manufacturing purchasing managers’ index (PMI) is to be believed, US inflation is expected to fall further and faster than the Fed forecast. In this case, the dollar has further room to fall this year.

However, analysts at Brown Brothers Harriman (BBH), an American investment bank, judged that the market is underestimating the possibility of the Fed raising interest rates. In the 4.5-5.5% range, the Fed would need to see further improvement in inflation before considering any sort of shift.

Euro strengthens as ECB hawks DXY (Photo: AFP)

Affected by the European Central Bank’s hawkish and optimistic remarks, the euro rose further against the dollar, reaching as high as $1.0927, the highest since April last year, before giving up gains and slightly up 0.05% to $1.1559.

Peter Kazimir, a member of the European Central Bank’s Governing Council, said on Monday that slowing inflation is good news, but this is not a reason to slow down the pace of interest rate hikes. It is expected that interest rates will need to be raised by 2 yards each in the next two meetings. European Central Bank President Christine Lagarde reiterated on the same day that the European Central Bank will continue to accelerate interest rate hikes in order to slow down inflation that is still too high.

Jane Foley, head of currency strategy at Rabobank, said lower natural gas prices and easing recession fears had at least taken away a lot of the pessimism and was one of the factors behind the euro’s strength in the future.

Following last week’s wild swings, the yen weakened 0.83% against the dollar to around 130.67 yen per dollar, failing to break above its 21-day moving average. The Bank of Japan released the minutes of its monetary policy meeting in December last year on Monday. Some central bank members pointed out that the Bank of Japan must reiterate and clearly explain that expanding the range of fluctuations in bond yields is not intended to exit the ultra-loose policy. One of the central bank members said that adjusting the policy target is not Suitable.

Analysts believe the Bank of Japan’s policy will continue at least until its March meeting, but one uncertainty is that Prime Minister Fumio Kishida will appoint a new Bank of Japan governor in February, which could lead to a change in policy.

The Bank of Canada will announce the interest rate meeting decision on Wednesday, and the Canadian dollar rose slightly to 1.3354 Canadian dollars against the US dollar. Analysts at TD Securities expect the Bank of Canada to raise interest rates by 1 yard to 4.5%, but do not rule out the possibility of future interest rate hikes. The Canadian dollar may be more sensitive to dovish signals.

Bitcoin ( BTC ) consolidated early Monday before briefly hitting a one-day high of $23,158 before easing back to around $22,980.47, up 0.85 percent, as investors shrugged off pessimism following the collapse of cryptocurrency exchange FTX.

As of 9:00 a.m. Taiwan time on Tuesday (28th), the US dollar index was at 101.9781. – 0.0452% EUR/USD exchange rate quoted 1 euro to 1.0874 US dollars. +0.0276% GBP/USD is trading at 1.2378 US dollars to 1 British pound. +0.0081% Australian Dollar to US Dollar (USD/AUD) exchange rate quoted 1 Australian Dollar to 0.7031 US Dollar. +0.0427% The U.S. dollar to Canadian dollar exchange rate (USD/CAD) is quoted at 1.3366 Canadian dollars to the U.S. dollar. 0% USD/JPY is quoted at 130.3500 yen to the US dollar. -0.2525%

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