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Dollar rises as central banks, including the Fed, prepare to make policy decisions

By on September 19, 2021 0

By Gina Lee – The dollar was higher Monday morning in Asia. However, moves have been limited as major Asian markets have been shut down and a large number of central banks, including the US Federal Reserve, prepare to make their final policy decisions.

The US dollar index that tracks the greenback against a basket of other currencies rose 0.06% to 93.282 at 11:16 pm ET (3:16 GMT).

USD / JPY edged down 0.01% to 109.95.

AUD / USD was down 0.39% to 0.7237 and NZD / USD was down 0.16% to 0.7028.

USD / CNY was flat at 6.4662 and GBP / USD was down 0.22% to 1.3712.

The Chinese and Japanese markets were closed on Monday. Investors are now waiting for the Fed to make its latest policy move on Wednesday for clues about the timing of asset reduction and interest rate hikes.

“The dollar is rebounding,” Westpac analyst Imre Speizer told Reuters, with the US currency drawing support from both the expectation of an imminent decrease in Fed assets and caution then that a rally in global equities begins to subside.

“Everyone is eyeing the Fed, waiting for a signal to decrease,” he added.

The central banks of Japan, UK, Switzerland, Sweden, Norway, Indonesia, Philippines, Taiwan, Brazil, South Africa, Turkey and Hungary will also make their political decisions while throughout the week.

It would only take two Fed members to change their minds for the dot plot of median projections to reflect increases in 2022, according to BDSwiss’ Marshall Gittler.

“It is therefore entirely possible that they will go from predicting no rate hike in 2022 to at least one. Likewise, they are now planning two hikes in 2023 which could easily drop to three as well,” he said. he told Reuters.

The Canadian dollar was on a downtrend ahead of the federal election later today. Outgoing Prime Minister Justin Trudeau is widely predicted that he will win, but he will likely lead a minority leader.

German voters will also vote on September 26.

In Asia-Pacific, the Chinese yuan has come under offshore pressure, with a focus on the ability of the China Evergrande group (HK: 3333) to honor its $ 83.5 million bond interest payment due Thursday. The slowing economic recovery in China and the recent tightening of regulations have also increased pressure on the yuan.

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