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Dollar Begins Strong Week Dominated by Central Bank Meetings By


© Reuters.

Author: Peter Nurse – The US dollar rose on Monday to near a 20-year high at the start of the week, as it was dominated by a series of central bank meetings, most notably the Federal Reserve meeting.

{942611 | . has been traded Dollar Index}} at 109.793, up 0.3% to stay close to 110.79, which it reached on September 7 for the first time since mid-2002.


The main focus this week will be on the United States, which will begin its political meeting on Tuesday.

The higher-than-expected US track in August has boosted expectations of a significant rate hike after the meeting on Wednesday. Common expectations are for a rate hike of 75 basis points, but some investors are also preparing for a full point hike and this possibility supports the dollar.

“We expect 75 basis points for the third consecutive year,” analysts at ING said in a note. “While high inflation means 100 basis points is a risk, inflation expectations and corporate price plans look less threatening, and growth projections are more uncertain, so we don’t think so. However, there is a more hardline message about stubborn inflation, which is that points Federal Reserve, the 4.25-4.5 market percentage will bring it closer to reflect the final interest rate pricing.”

The Federal Reserve isn’t the only central bank meeting this week – policymakers in the UK, Switzerland, Norway and Japan will also meet this week as the global fight against inflation intensifies.

, rose 0.3% to 143.28 ahead of the Japan holiday and Thursday meeting. The BoJ is very likely to stick with the very expansionary monetary policy that has affected the whole year.

However, the central bank may say something about the yen’s weakness amid speculation that Japanese officials are about to intervene in the currency market to support the weaker currency, which hit a 24-year low against the dollar earlier this month.

On the other hand, ve expected to raise interest rates even as growth weakens significantly in Europe.

The World Bank warned last week that the global economy is slowing sharply and that “even a small blow to the global economy next year could push it into recession.”

It fell 0.5% to 0.9970 and 0.2% to 1.1385 and risk-sensitive to 0.6684, down 0.5%.

It rose 0.4% to 70103 and the pair climbed to a two-year high to stay above the psychological threshold of 7 after the People’s Bank of China lowered its repo rate on Monday in an effort to support the economy hard hit by the COVID-19 shutdown.

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