This week is likely to see the dollar consolidate as investors wait on the Federal Reserve’s meeting next week, when the U.S. central bank is expected to hike rates by an additional 25 basis points.
The pace of last week’s dollar decline “seemed unusually large,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York, noting that the market should steady and see a firmer dollar this week.
Fed funds futures traders are pricing in an additional 32 basis points of tightening with the benchmark rate expected to peak at 5.40% in November.
The dollar index was last down 0.12% at 99.832, after falling to 99.574 on Friday, the lowest since April 2022.
The dollar dipped 0.07% against the Japanese yen to 138.65, after dropping to 137.245 on Friday, the lowest since May 17.
Persons:
”, Marc Chandler, Francesco Pesole, Bundesbank, Joice Alves, David Holmes, Andrea Ricci
Organizations:
YORK, Federal, Bannockburn Global, Treasury, ING, International Monetary Fund, European Central Bank, Thomson
Locations:
U.S, Bannockburn, New York, Germany, London