Dollar falls from a one-month peak as global markets firms
The dollar declined from a near one-month peak as global markets firmed on September 21. Remarkably, a risk-off mood dominated by solvency uncertainty of China’s Evergrande weighed on the greenback. As we know, the market is waiting for the result of the Federal Reserve’s two-day policy meeting.
After hitting the highest level since August 23 on September 20, the greenback straddled around the unchanged mark on the day. The greenback’s rise came as early gains on Wall Street’s benchmark equity indexes faded.
Fed’s policy announcement will be announced on Wednesday, which will likely provide cues of when the central bank will start to scale back its massive bond-buying program.
The Fed kicked off its two-day meeting on September 21 and is anticipated to keep its benchmark rate unchanged when it delivers its monetary policy statement.
Notably, the Fed’s plan to tighten its monetary policy measures could help offset less favorable factors for the dollar, such as a wide trade deficit and higher inflation. However, the rise to the greenback from Fed tightening isn’t anticipated to be as meaningful as many assume.
The U.S. dollar index declined by 0.019% after hitting a high of 93.455 on September 20. Meanwhile, the euro dropped 0.01% to settle at $1.1724.
U.S. currency increased on Monday, along with other safe-havens
The U.S. currency increased on Monday, along with other safe-havens such as the Japanese yen and Swiss francs. Remarkably, the rise was supported by worries about the fallout from the possible default of China Evergrande rattled financial markets.
The offshore Chinese yuan fell against the dollar to 6.4817 per dollar.
Moreover, before Evergrande’s debt crisis confused markets, the U.S. currency had been supported ahead of the Federal Reserve meeting this week. Remarkably, economists surveyed in a Reuters poll anticipating policymakers to signal expectations of a tapering plan to be pushed back to November.
The safe-haven Japanese yen increased by 0.13% against the dollar to settle at 109.23 per dollar. The British pound gained 0.01% and was last trading at $1.3658.
Meanwhile, the Canadian dollar was poised to halt three straight days of drops against the dollar. As we know, Canadian Prime Minister Justin Trudeau was re-elected to a third term. However, he failed to win a majority in the parliamentary elections.
The Canadian dollar surged 0.06% against the dollar at 1.28 per dollar.
In cryptocurrencies, bitcoin last declined by 2.01% to $42,172.11.
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