Markets

Dollar continued to rise as Fed minutes pointed to bond reduction

Author: Peter Nurse

investing. com – The dollar retained its strong sentiment in Europe on Thursday. The minutes of the Fed’s latest meeting indicated that the bank’s monetary policy tightening was indeed advancing.

Measures the performance of the US dollar against a trade-laden basket of 6 major currencies. US dollar index, up 0.1% to 92,720.

USD/JPY fell 0.4% to 110.19 EUR/USD traded at 1.1797, up 0.1%. GBP/USD slumps 0.2% to 1.3769 AUD/USD decreased 0.5% and traded from 0.7440.

At its June meeting, the Fed pointed out that there will be two rate hikes in 2023 and the first one will probably take place in 2022. Investors are therefore minutes was waiting eagerly.

While the minutes showed that the politicians generally agreed that the conditions for reducing the bond purchase program are not ripe now, some pointed out that “in the light of the information received, these conditions may occur earlier than previous claims”.

“US politicians are increasingly embracing the idea of ​​reducing their asset purchases, and an announcement could be made as soon as the last quarter of 2021,” said Kathy Lien, analyst at BK Asset Management.

US economic data points to a strong economic recovery overall, and Thursday’s weekly jobless data will follow.

made last week new applications, expected to drop 14,000 to 350,000. In addition ongoing applications

Forecasts for are down 134,000 to 3.335 million.

On the other hand, the European Central Bank (ECB) will share the result of its 18-month strategic review, and the bank is expected to define the objective symmetrically, increasing the inflation target from “below 2% but close” to 2%.

In addition, USD/CNY rose 0.1% to 6.4786, hitting nearly a week’s high. China’s State Board said the authorities will lower the bank reserve requirement ratios over time to support the economy. This was taken as a sign of strong expansion.

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