FX Signals – Dollar seesaws ahead central bank week

Telegram Forex Signals – SINGAPORE (Reuters) – The dollar distanced itself from an eight-month trough on Monday ahead of a slew of central bank meetings this week, though gains were capped by dovish repricing of the U.S. Federal Reserve’s rate-hike expectations as compared to more hawkish counterparts.

The U.S. dollar index, which measures the greenback against a basket of currencies, rose 0.03% to 101.92, after having hit an eight-month low of 101.50 last week.

It was on track for a fourth consecutive monthly loss of more than 1.5%, pressured by expectations that the Fed was nearing the end of its rate-hike cycle and that interest rates would not have to rise as high as previously feared.

Sterling was up 0.04% at $1.2405, while the euro rose 0.06% to $1.0874.

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The Fed is widely expected to deliver a 25 basis point rate hike – a down-shift from its 50bp and 75bp increases seen last year – while market watchers say the BoE and ECB are likely to raise rates by 50bp each.
Dollar Edges Higher Fed in Focus

The euro, which is headed for a nearly 1.5% monthly gain, has drawn support from continued hawkish rhetoric by ECB policymakers and ebbing fears of a deep recession in the euro zone. Dollar Hits One-Year High Versus Yen

Elsewhere, the New Zealand dollar slipped 0.05% to $0.6491, while the yen jumped close to 0.2% to 129.62 per dollar.

The Australian dollar fell 0.3% to $0.7088 but was on track for a monthly gain of nearly 4%, after the shock that Australia’s inflation rate shot to a 33-year high last quarter caused traders to ramp up bets that the Reserve Bank of Australia will have to tighten interest rates further. Dollar Edges Higher; Central Bank Meetings in Focus

With China returning from its Lunar New Year holiday, focus will be on the upcoming release of its purchasing managers’ index (PMI) data on Tuesday.

“The market will be looking … hopefully not to get disappointed,” said NAB’s Catril.

“So far, the data coming from China, or the vibes coming from China, do play to the view that a good reopening in terms of activity is likely to unfold.”

Lunar New Year holiday trips inside China surged 74% from last year after authorities scrapped COVID-19 travel curbs, state media reported on Saturday. Euro set for biggest monthly drop

The onshore yuan jumped against the dollar on Monday, rising roughly 0.5% to 6.7530, as investors cheered signs of economic recovery indicated by robust holiday spending and tourism data.

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FX Signals – Dollar seesaws ahead central bank week

EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF, NZD/USD and USD/CAD, Gold, Oil and many many more..These are the three most traded currencies beside the US dollar. Minor pairs have a smaller market share compared to major pairs. Because of this they can exhibit lower market liquidity. Lower market liquidity will mean that a broker will give wider dealing forex spreads.

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FX Signals – Dollar seesaws ahead central bank week