Written by Gina Lee
Investing.com – The dollar rose Monday morning in Asia, and the latest decision by the US Federal Reserve should be made later in the week.
The one that tracks the dollar against a basket of other currencies fell 0.10% to 95,735 at 12:11 ET (5:11 GMT).
The pair rose 0.23% to 113.94.
The pair fell 0.07% to 0.7178 and the pair fell 0.02% to 0.6719.
The pair fell 0.10% to 6.3326, while the pair rose 0.01% to 1.3555.
“The Fed has markets on a leash. And once again this week, it will pull and twitch,” Frederic Neumann, co-head of HSBC’s Asian Economic Research, said in a note.
The key driver currently driving currency markets is when and how quickly central banks will raise interest rates and start reducing assets.
“What will encourage investors to hurry will be the guidelines that President Powell could give at his press conference on quantitative tightening later in 2022,” Neumann’s note said, adding that he did not expect a change in policy.
The Fed will make its policy decision on Wednesday, and some investors are beginning to speculate that it is possible, though unlikely, that the central bank will raise interest rates for the first time since early 2020.
“We believe the risk is higher because the Fed’s statement shows the urgency to act soon, probably in March 2022, faced with very high inflation. The urgency could culminate in a decision to abruptly halt quantitative easing (QE) by mid-February,” Analysts said. The Commonwealth Bank of Australia said in a note.
“A bullish statement and / or a faster end to the QE program could even encourage markets to appreciate the risk of a 50-point rate hike in March,” the note added, and analysts predict it would lead to a shocking reaction higher in the dollar.
Investors are also awaiting a policy decision, which should be made just before the Fed. In the Asia-Pacific region, Australia released its consumer price index on Tuesday, which will guide the position of the Australian Reserve Bank in a policy decision to be made in February.
In cryptocurrencies, bitcoin traded at $ 36,026, after falling 10% on Friday and falling to as much as $ 34,000 on Saturday. Increased exposure of institutional investors to cryptocurrencies means their moves are more closely linked to other risky assets, some investors have warned.
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