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The dollar falls to the prudence of the Fed and before the elections of the United Kingdom

The dollar falls to the prudence of the Fed and before the elections of the United Kingdom


The dollar is around four months low this Thursday, recording its biggest losses in recent weeks after the Federal Reserve predicted that it would keep interest rates unchanged until 2020.

Investors also remain cautious before Sunday’s deadline, when the next batch of US tariffs on Chinese imports will take effect, and awaiting a meeting of the European Central Bank and the United Kingdom elections.

The greenback records minimums of more than one month against the euro after the Fed meeting and remains just above that level at 10:24 (CET).

The dollar index, which follows the evolution of this currency with respect to a basket of six other major currencies, recovers somewhat after registering a minimum of four months, although it remains at low levels at 97.09.

The dollar rises to 108.61 per yen.

“The Fed was not as optimistic as people expected, and that is consistent with a drop in the dollar and the decline in bond yields we have observed,” said Commonwealth Bank of Australia analyst Joe Capurso.

Fed Chairman Jerome Powell has said that the economic forecasts for the United States were favorable, as the central bank announced its decision to keep the rates unchanged, although it has said that a significant and persistent increase in inflation would be necessary to Upload the types.

The new economic projections have indicated that 13 of the 17 responsible for the monetary policy of the Fed do not foresee any change in interest rates until at least 2021.

Investors will be awaiting the impending deadline for the commercial issue, the first meeting of Christine Lagarde at the head of the ECB and voting in the British elections.

Everything indicates that the president of the United States, Donald Trump, will meet with the main commercial advisers on Thursday to discuss the tariffs that would enter into force on December 15 on some 160,000 million dollars in Chinese products, as reported by Reuters.

The decision to move forward with tariffs could shake the financial markets and disrupt the talks between the United States and China to end the trade war that already lasts 17 months between the two largest economies in the world.

The ECB’s monetary policy is expected to remain unchanged, so that attention is likely to focus on Lagarde’s type of discourse as investors will seek clues about the future of the monetary stimulus and policy review.

The weakening of the dollar has helped the pound to rise to the level of 1.3202.

The pound is moving based on a conservative majority that could control Parliament and remove the United Kingdom from the European Union at the end of January, and anything else could cause a fall.

The voting in the elections of the United Kingdom concludes at 23:00 hours (CET) and the exit polls and the first results will probably be known soon after; Traders expect to know some result about 4:00 hours (CET) on Friday.

“Prices should skyrocket … with probable acute reactions as each district publishes its results,” said Chris Weston, head of research at the Pepperstone brokerage house in Melbourne.

“We are closely following the implied volatility of the GBP/USD as events unfold, and there is no doubt that it will be very high, as traders take for granted blunt movements on the part of the pound.”

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