Dollar Weaker Ahead of Fed; Aussie Outperforms
A dollar gauge edged lower Monday ahead of the Federal Reserve deciding on interest rates later this week. The Australian dollar outperformed Group-of-10 peers after US-China trade progress buoyed risk sentiment, and Reserve Bank Governor Michele Bullock indicated that the Fed remained cautious on rates.
The Bloomberg Dollar Spot Index dropped nearly 0.1%
The market is pricing in a 25bps rate reduction in the US this Wednesday; all eyes on Fed Chair Jerome Powell comments amid data scarcity.
Goldman Sachs Group Inc. introduced its 10-year FX forecast; this came after the bank started releasing 10-year forecast for the bond market.
Their forecasts for 2035 included USD/JPY at 100, USD/CNY at 5.17, while they see EUR/USD at 1.21 and GBP/USD at 1.24
AUD/USD rose 0.7% to 0.6556, highest since Oct. 10
Bullock said the RBA will have to wait for more economic data before deciding whether to lower rates further.
Trade negotiators from the US and China came to terms on a range of contentious issues ahead of a meeting between US President Donald Trump and his counterpart Xi Jinping.
USD/JPY traded flat near 152.87
Prime Minister Sanae Takaichi said she had a “good and candid” conversation with US President Donald Trump over the weekend.
EUR/USD inched up 0.2% to 1.1646
German business confidence jumped to the highest level since 2022, bolstering hopes that Europe’s largest economy is finally emerging from two years of contraction.
Source : Bloomberg.com