30 Jan 2024 , 09:02 AM
Tuesday saw the dollar move in narrow ranges compared to its main competitors as investors watched the Federal Reserve’s monetary policy decision for indications on when the American central bank could lower interest rates.
The highly anticipated payroll report, which is scheduled for release on Friday, will be previewed in the interim by data on job openings from the U.S. Department of Labour Statistics, which is anticipated later in the day.
In the Asian morning, the dollar remained stable as traders exercised caution ahead of Tuesday’s two-day FOMC meeting.
The emphasis is on the tone that Fed Chair Jerome Powell establishes at the news conference on Wednesday and any indications of rate decreases in the near future, even if the Fed is likely to keep interest rates unchanged.
According to the CME Group’s FedWatch Tool, markets are now pricing in a 46.6% possibility that the US central bank would start cutting in March, down from 73.4% a month ago. This is because data continues to support the notion that economic growth is robust.
Start of the domestic jobs data week will be marked with the release of the U.S. job opening figures on Tuesday. The main U.S. payrolls report for January will come out on Friday. The data will provide additional insight into whether the largest economy in the world is still robust following the Fed’s aggressive rate-hiking campaign.
With flash GDP figures for the fourth quarter released on Tuesday, the euro zone will also provide another glimpse beneath the economic hood, but the forecast is expected to be far worse than that of the US.
Even if policymakers at the European Central Bank couldn’t agree on when exactly to drop rates or when to take other action on Monday, traders were still fully pricing in a move in April.
At $1.0838, the euro remained largely unchanged.
Ahead of this week’s monetary policy meeting of the Bank of England, the value of sterling was last trading at $1.2716.
In other news, the dollar dropped 0.15% versus the yen to trade at 147.24 per US dollar.
December’s unemployment rate in Japan dropped to 2.4% from November, according to official statistics released on Tuesday. This figure was somewhat lower than the 2.5% median estimate of analysts surveyed by Reuters.
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