Trade News: Dollar Moves Little Ahead Fed Decision
TRADE NEWS – On Tuesday, the US dollar moved little in Asia. Moreover, this occurred ahead of the expected decision of the Federal Reserve on Wednesday.
The US dollar index, which tracks the greenback’s strength against its major peers, traded lower 0.01% to 96.545.
Meanwhile, there was a little movement in the index. This was amid the anticipation of traders about the expected Fed rate hike due on Wednesday. Further, markets are likely to focus their attention on the expectations of the Fed about rate hikes next year. In fact, many have projected of a more dovish outlook.
The Fed predicted that there would be three rate hikes for 2019. However, there a few investors who expect that the Fed policymakers would call for two rate increases for 2019. This was amid the continuous wobbling of global growth.
Meanwhile, the USD/CNY pair was also flat at 6.8975 amid thorough focus of investors on Chinese President Xi Jinping’s speech. Xi Jinping has addressed a speech during the 40th anniversary of the “reform and opening up” of China on Tuesday.
“No one is in a position to dictate to the Chinese people what should or should not be done,” Xi said.
Then, he urged China to “stay the course” on its existing path of reform.
The People’s Bank of China (PBOC) placed a 6.8854 reference rate for yuan compared to Monday’s fix of 6.8908.
Moreover, the yen increased in battling against the dollar. Moreover, there was a 0.3% drop to 112.53 in the USD/JPY. This followed after the revision of Japan’s Cabinet Office on its economic growth forecast to 0.9% for this year. Further, this was in comparison with the previously projected 1.5% increase.
Trade News: Dollar withdraws from 18-month high
On Monday, the US dollar had withdrawn from an 18-month high. Further, this followed after the release of disappointing economic data.
The US Dollar Index, which measures the greenback’s strength against a basket of other peers, declined 0.2% to 96.69. This came after it reached a 9.69 high over the past 24 hours.
There was a drop seen in December’s Empire State manufacturing index. Consequently, this contributed worries about the US economy’s health. According to the New York Fed on Monday, the reading was at 10.90 from 23.30 in November.
Meanwhile, there are expectations that the Federal Reserve will implement a 25-basis point rate hike on Wednesday. In fact, this would the fourth time that the Fed will hold a rate increase.
Still, investors have stayed uncertain concerning the number of rate hikes next year.