In early European trading, the US dollar is holding steady ahead of the release of key inflation data and the Federal Reserve meeting minutes. The Dollar Index is near a two-week low at 105.557, reflecting recent dollar weakness. Dovish comments from Fed officials have contributed to this weakness, suggesting the end of interest rate hikes.
Atlanta Fed President Raphael Bostic stated that further rate increases might not be necessary, echoing similar sentiments from other Fed officials. The market eagerly awaits the Fed's September meeting minutes to gauge this dovish shift.
The direction of monetary policy depends on inflation data. The September producer price index is expected to rise 1.6% year-on-year and 0.3% month-on-month, with core PPI increasing by 2.3% year-on-year and 0.2% month-on-month.
On the other hand, the British pound is relatively stable, with GBP/USD at 1.2297, up 0.10%. The UK economy saw a 0.5% decline in July but is expected to rebound by 0.2% in August and 0.3% for the three months leading up to August.
The IMF report predicts the Bank of England may need to maintain high-interest rates into 2024 due to weak growth and stubborn inflation. The Bank of England's Financial Policy Committee also warned that high rates could pressure households.
In the US, the Federal Reserve's hawkish stance has shifted to a more dovish one as rising Treasury yields could slow economic growth and lower inflation. Atlanta Fed President Raphael Bostic and other Fed officials have suggested that further rate hikes may not be necessary. This reflects changing central bank dynamics in response to economic conditions.
If the bullish trend continues, the price might reach levels of 1.2398. In the opposite scenario, as a pivot point might be considered 1.2263, after which the bears might start entering and the price might fall to 1.2181.
Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
Atlanta Fed President Raphael Bostic stated that further rate increases might not be necessary, echoing similar sentiments from other Fed officials. The market eagerly awaits the Fed's September meeting minutes to gauge this dovish shift.
The direction of monetary policy depends on inflation data. The September producer price index is expected to rise 1.6% year-on-year and 0.3% month-on-month, with core PPI increasing by 2.3% year-on-year and 0.2% month-on-month.
On the other hand, the British pound is relatively stable, with GBP/USD at 1.2297, up 0.10%. The UK economy saw a 0.5% decline in July but is expected to rebound by 0.2% in August and 0.3% for the three months leading up to August.
The IMF report predicts the Bank of England may need to maintain high-interest rates into 2024 due to weak growth and stubborn inflation. The Bank of England's Financial Policy Committee also warned that high rates could pressure households.
In the US, the Federal Reserve's hawkish stance has shifted to a more dovish one as rising Treasury yields could slow economic growth and lower inflation. Atlanta Fed President Raphael Bostic and other Fed officials have suggested that further rate hikes may not be necessary. This reflects changing central bank dynamics in response to economic conditions.
If the bullish trend continues, the price might reach levels of 1.2398. In the opposite scenario, as a pivot point might be considered 1.2263, after which the bears might start entering and the price might fall to 1.2181.
Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.