Investing.com – The U.S. dollar held steady in the European market on Monday (22nd), as tensions in the Middle East eased, and the focus turned to the Federal Reserve’s favorite inflation indicator to be released on Friday.
As of 18:37 Beijing time (06:37 a.m. ET), the dollar was flat at 105.98 against six trade-weighted major currencies; it was flat at 106.15, down from the five-month high of 106.51 hit last week. fall back.
The benchmark U.S. bond yield was at 4.655% and at 4.876%.
Dollar steady ahead of inflation data
The dollar surged to new highs last week after Israel launched a missile attack on Iran, raising concerns about an escalation of conflict in the Middle East. However, Iran downplayed the Israeli attack on Iran, avoiding the outbreak of regional war and cooling tensions.
“Sentiment across asset classes is broadly supportive as the week begins,” ING analysts said in a note. “All interested parties appear to have chosen to downplay Friday’s (19th) Scenarios of the scale and consequences of an Israeli attack on Iran.”
However, the dollar remains supported by strong U.S. economic data and persistent inflation, which, coupled with a series of hawkish comments from Federal Reserve officials, has reduced the likelihood of a near-term rate cut by the Fed.
In addition, policymakers will not speak this week before next week’s Federal Reserve interest rate meeting, so the focus will be on the PCE price index on Friday (26th). Analysts expect the inflation rate to remain high in March.
Other key economic data released this week include expectations for a slight slowdown from the previous quarter. and data are also due out this week, along with revisions to consumer confidence and inflation expectations.
EURmicroliter,butEuropean Central BankorCut interest rates ahead of schedule
It was unchanged at 1.0653, but still near six-month lows as a weakening euro zone economy may lead the European Central Bank to cut interest rates before the Federal Reserve.
French Bank of France President Francois Villeroy de Galhau said on Sunday that rising tensions in the Middle East were unlikely to push up energy prices and would not affect the European Central Bank’s plan to start cutting interest rates in June.
“Unless something unexpected happens, there is no need to wait too long,” he said in an interview. “At the moment, the conflict has not led to a sharp increase in oil prices. If that happens, we will have to analyze monetary policy to determine This impact is temporary and limited, and will still be transmitted to underlying inflation (excluding commodities).”
It fell 0.23% to 1.2342, just above Friday’s low since mid-November. This comes after the Governor and Deputy Governor of the Bank of England hinted last week that UK inflation was slowing as expected.
ING said: “There was some volatility in sterling markets on Friday after Bank of England deputy governor Dave Ramsden eased concerns about price pressures and signaled signs that UK inflation was moving closer to the euro zone. Crucially. Yes, he added that the Bank of England would “react” as evidence of inflation accumulates.
Yen weakens ahead of Bank of Japan meeting
It rose 0.05% to 154.73, still well above the 154 level and close to a 34-year high, making investors wary of the possibility of Japanese government intervention in the currency market.
The focus this week is the Bank of Japan’s interest rate decision on Friday (26th) – this is the Bank of Japan’s first interest rate meeting after its historic interest rate hike in March. Investors need to pay close attention to clues about future interest rate hikes and policy changes.
rose 0.05% to 7.2437; remained unchanged at 7.2506. reported 2.256%.
Earlier today, the People’s Bank of China (China’s central bank) kept the LPR interest rate unchanged at a historically low level, in line with expectations.
Wen Bin, chief economist of China Minsheng Bank, said that considering that the probability of the Federal Reserve cutting interest rates has continued to decline in the near future, the pressure on domestic commercial banks’ interest margins is still high, and the requirements to prevent idling of funds still exist, when the economy shows signs of stabilization and recovery, domestic and foreign interest rate spreads and deposits Under the dual constraints of loan interest rate spreads, the current interest rate level is generally appropriate.
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