Dollar Declines Against Majors By IFX

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© Reuters. Dollar falls against major currencies

The US dollar slides against most major currencies in Tuesday morning trading ahead of the start of the two-day meeting of the Federal Reserve (Fed), the Australian dollar fell to a five-month low on signals from the Central Bank of Australia that it may need to cut rates again.

By 08:34 Moscow time, the pair is trading at $1.1235 against $1.1217 in previous trading.

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The dollar against the yen is 108.29 yen compared to 108.54 yen at the close of the last session. The euro against the yen is trading at 121.68 yen compared to 121.76 yen the previous day.

The ICE Dollar Index, which measures the value of the US dollar against six major world currencies, is down 0.15% on Tuesday. The WSJ Dollar indicator, which tracks the dynamics of the dollar against 16 major world currencies, is losing 0.1%.

The pound sterling is trading against the dollar at $1.2532 versus $1.2534.

The Australian dollar stands at $0.6839 against $0.6852 in the session on Monday. At some point in trading, the Australian national currency hit a five-month low, dropping 0.3% to 0.6833.

The minutes of the meeting of the Reserve Bank of Australia (RBA) indicated that the regulator is considering the possibility of lowering the rate again, writes Bloomberg.

“The leadership of the Central Bank believes that a further reduction in the rate is likely to be appropriate,” the minutes of the June meeting of the RBA say.

The Australian Central Bank in early June lowered its base interest rate by a quarter of a percentage point, to a record low of 1,25% per annum.

The base rate was reduced for the first time in almost three years. The regulator explained its decision by the desire to stimulate employment growth and more likely to ensure that inflation will meet the medium-term target.

Market participants also focused on the US Federal Reserve meeting, the results of which will be summed up on Wednesday. Last week, Fed Chairman Jerome Powell announced the readiness of the US Central Bank to support the US economic recovery. His words were taken by traders as a signal that the Fed is open to lowering the base interest rate.

Although the current forecast of the Fed management does not provide for a change in the base interest rate in the US in 2019, the market expects one or two rate cuts. According to many experts of the largest Wall Street banks, the Fed will ease monetary policy in order to support the US economy against the backdrop of global trade and macroeconomic risks.

Another argument in favor of softening monetary policy may be weak statistical data, experts believe. As it became known on Monday, the index of manufacturing activity in New York Empire Manufacturing in June fell to minus 8.6 points from 17.8 points in May. The value of the indicator became negative for the first time in two years, and the rate of decline was the highest in history.

Meanwhile, the market continues to follow the development of the trade conflict between the US and China.

Негативным фактором для мировых рынков стали заявления главы министерства торговли США Уилбура Росса о том, что американскому президенту Дональду Трампу и председателю КНР Си Цзиньпину в ходе встречи на саммите G20 в Осаке 28-29 июня едва ли удастся урегулировать торговый конфликт между двумя странами….

image
© Reuters. Dollar falls against major currencies

The US dollar slides against most major currencies in Tuesday morning trading ahead of the start of the two-day meeting of the Federal Reserve (Fed), the Australian dollar fell to a five-month low on signals from the Central Bank of Australia that it may need to cut rates again.

By 08:34 Moscow time, the pair is trading at $1.1235 against $1.1217 in previous trading.

The dollar against the yen is 108.29 yen compared to 108.54 yen at the close of the last session. The euro against the yen is trading at 121.68 yen compared to 121.76 yen the previous day.

The ICE Dollar Index, which measures the value of the US dollar against six major world currencies, is down 0.15% on Tuesday. The WSJ Dollar indicator, which tracks the dynamics of the dollar against 16 major world currencies, is losing 0.1%.

The pound sterling is trading against the dollar at $1.2532 versus $1.2534.

The Australian dollar stands at $0.6839 against $0.6852 in the session on Monday. At some point in trading, the Australian national currency hit a five-month low, dropping 0.3% to 0.6833.

The minutes of the meeting of the Reserve Bank of Australia (RBA) indicated that the regulator is considering the possibility of lowering the rate again, writes Bloomberg.

“The leadership of the Central Bank believes that a further reduction in the rate is likely to be appropriate,” the minutes of the June meeting of the RBA say.

The Australian Central Bank in early June lowered its base interest rate by a quarter of a percentage point, to a record low of 1,25% per annum.

The base rate was reduced for the first time in almost three years. The regulator explained its decision by the desire to stimulate employment growth and more likely to ensure that inflation will meet the medium-term target.

Market participants also focused on the US Federal Reserve meeting, the results of which will be summed up on Wednesday. Last week, Fed Chairman Jerome Powell announced the readiness of the US Central Bank to support the US economic recovery. His words were taken by traders as a signal that the Fed is open to lowering the base interest rate.

Although the current forecast of the Fed management does not provide for a change in the base interest rate in the US in 2019, the market expects one or two rate cuts. According to many experts of the largest Wall Street banks, the Fed will ease monetary policy in order to support the US economy against the backdrop of global trade and macroeconomic risks.

Another argument in favor of softening monetary policy may be weak statistical data, experts believe. As it became known on Monday, the index of manufacturing activity in New York Empire Manufacturing in June fell to minus 8.6 points from 17.8 points in May. The value of the indicator became negative for the first time in two years, and the rate of decline was the highest in history.

Meanwhile, the market continues to follow the development of the trade conflict between the US and China.

A negative factor for world markets was the statements by the head of the US Department of Commerce, Wilbur Ross, that US President Donald Trump and Chinese President Xi Jinping during the meeting at the G20 summit in Osaka on June 28-29 will hardly be able to resolve the trade conflict between the two countries.

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