The dollar is heading to record the second monthly loss

The dollar is heading to record the second monthly loss
Economy

2023-04-28 | 02:20


The dollar is heading towards incurring a second consecutive monthly loss, today, Friday, amid growing expectations that the Federal Reserve (the US central bank) may soon end the cycle of sharply raising interest rates, while the yen settled near the highest level in a week, ahead of an important decision by the government. central bank.
All eyes in Asia are on the Bank of Japan's monetary policy decision, as the new central bank governor, Kazuo Ueda, is expected to keep monetary policy loose.
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Prior to the decision, the Japanese yen rose slightly by 0.1% to 133.84 against the dollar, and rose more than 0.1% against the pound sterling.

"I don't expect the Bank of Japan to change its monetary policy this time, but the recently released Tokyo CPI was higher than expected... and I think that is pressure," said Tina Teng, market analyst at CMC Markets. on the Bank of Japan, and may do something in the near future.”

Government data showed on Friday that core consumer prices in Tokyo rose 3.5 percent in April from the same month last year, exceeding market expectations, in a sign of widening inflationary pressures in the world's third-largest economy.

The dollar fell against most of the major currencies, but its losses were limited by data pointing to continued inflation in the world's largest economy, which boosted expectations of a 25 basis point interest rate hike at the Federal Open Market Committee meeting next week.

Data released on Thursday showed that while US economic growth slowed more than expected in the first quarter of the year, consumer spending accelerated, accompanied by a rise in inflation.

The dollar index recorded in the latest reading 101.45 against a basket of currencies, and is heading to record a new monthly loss of more than 1%, after it fell by about 2.3% in March.

The pound sterling fell 0.06 percent to $1.2492.

And the euro settled near the highest level in a year, and recorded in the latest transactions 1.1033 dollars. It looks forward to achieving a monthly gain of close to 2%.

The single currency received support from expectations that the European Central Bank still has more interest-raising decisions ahead of it.

Analysts at ING said: "Investors prefer currencies that can present a continuing domestic tightening cycle and still have room for sudden sharp tightening at upcoming meetings."

The Australian dollar rose 0.05% to $0.66335, and its New Zealand counterpart rose 0.07% to $0.61515.

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