Central bank monetary policy meetings in the United States, Europe and Japan are expected to set the direction of the market this week, with markets hitting clues from policymakers on the next course of interest rates.
The U.S. central bank is generally expected to suspend the tightening cycle throughout the year as officials assess the impact of rising interest rates to the highest level in 16 years, but with the release of data on inflation on Tuesday, there could be some surprises.
Market expectations on the CME FedWatch Index point to a 78.2% chance that the Fed’s next move will be to stabilize interest rates, but given expectations for the next meeting, markets see a likelihood of 54% that the Fed would return to raise interest rates by 25 basis points, against the possibility, 33.6% said it would prove it again.
On the other hand, it is clear that the European Central Bank is heading for another interest rate hike on Thursday, while the Bank of Japan is expected to stick to its accommodative monetary policy at the end of the week.
price movements
The dollar index fell about 0.5% last week, marking its worst weekly performance since mid-April. And it has declined in recent trades by 0.1% to 103.39.
The euro rose 0.2% to $1.0772 in early trading in London, after rising 0.4% last week, its first weekly gain in about a month.
The Japanese yen fell to 139.49 against the dollar, ahead of a meeting of the Japanese central bank, and before expectations of a moderate economic recovery.
New Zealand’s central bank indicated last month that it had completed its monetary tightening, after raising interest rates to the highest level in 14 years at 5.5%, ending the most intense cycle of hikes. applied since 1999, which caused the New Zealand dollar to fall. down 2.7% in May, but it was up 0.1% in the latest trades, registering $0.6135.
The pound rose 0.1% and the Australian dollar 0.3% to $0.6763, but a public holiday in Australia capped trading.
In offshore trading, the Chinese yuan continued its losses to trade at its lowest level since November as weak data recently released raised expectations that China’s central bank would adopt monetary easing this year.
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