The dollar index, which measures the greenback against six major currencies, had a dismal start to 2023 and ended up rising 0.068 percent to 103.710. The index jumped 8% last year, marking its biggest annual jump since 2015 thanks to the impact of the financial crisis. raised raise interest rates to tackle inflation.
Christopher Wong, currency strategist at OCBC Bank in Singapore, said the dollar is likely to strengthen as “market activity gradually picks up this week”.
After making four consecutive 75 basis point increases, the US Central Bank raised interest rates by 50 basis points last month. Minutes of the December meeting will be released on Wednesday, with investors looking for signals on the path the Fed is likely to take in 2023.
city Strategists said the minutes could turn out to be more interesting as there could be more of a difference between the doves and the hawks on how high interest rates will ultimately go.
“We will also be looking for any guidance on what could determine the size of the rally at the February meeting, but will not expect any specific guidance,” Citi said. The Times added that they continue to expect a 50-basis-point rally in February.
Investor attention will also be on the payroll report due to be released on Friday. Elsewhere, the Japanese yen gained 0.46% against the greenback at 130.12 to the dollar, touching its highest level since June.
Nikkei reported on Saturday that the Bank of Japan (BOJ) is considering raising its inflation forecast in January to show price growth close to its 2% target in fiscal year 2023 and 2024.
The BOJ’s inflation forecast upgrade is likely to fuel speculation that the central bank is looking to adjust its extremely loose monetary easing policy and will come after the BOJ rattles the markets. market by extending the range of the 10-year yield cap.
Meanwhile, the euro fell 0.07% to $1.0655, while the pound was last traded at $1.2037, down 0.07% on the day.
