Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Dollar Edges Higher; Fed in Focus, Yuan Weakens as China Reopens

ForexSep 22, 2021 03:14AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Peter Nurse - The dollar edged higher in early European trade Wednesday, but moves have been capped ahead of the conclusion of the crucial Federal Reserve meeting later in the session. 

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher at 93.255, just off Tuesday’s high of 93.455, the strongest level since Aug. 23.

USD/JPY rose 0.3% to 109.54 after the Bank of Japan kept its negative interest rate and asset-buying targets unchanged earlier Wednesday, as largely expected, while flagging Covid-linked pressures on the economy.

EUR/USD edged lower 0.1% to 1.1721, GBP/USD fell 0.1% to 1.3651, while the risk sensitive AUD/USD rose 0.2% to 0.7252, rebounding from a three-week low, helped by an improvement in risk sentiment after China Evergrande Group (HK:3333) pledged to pay the scheduled coupon on a yuan bond that is due on Thursday.

The highlight Wednesday is the conclusion of the latest Fed meeting, with traders looking to see if the central bank signals the scaling back of asset purchases later this year.

“Markets may be more sensitive to any signals about the timing of monetary tightening as the Dot Plot projections are released along with other economic forecasts,” said analysts at ING, in a note. “It is quite a close call, but we do not expect the Median Dot Plot for the first rate hike to shift from 2023 to 2022.”

The central bank will release a statement at 2 PM ET (1800 GMT), plus updated quarterly estimates, including its dot plot of rate projections, to be followed 30 minutes later by a press conference from Chair Jerome Powell.

Meanwhile, USD/HUF rose 0.1% to 300.88 and EUR/HUF climbed 0.1% to 352.70 after the Hungarian central bank increased its benchmark rate by just 15 basis points to 1.65% on Tuesday, halving the 30 bps hikes it has undertaken in each of the past three months.

The central bank is trying to balance surging inflation with the fallout from the latest wave of the global pandemic.

USD/CNY traded 0.1% higher at 6.4686, with the yuan weakening after the northeastern city of Harbin went into semi-shutdown after reporting new locally transmitted COVID-19 cases for the first time since early February. That outweighed any short-term relief at the news from Evergrande.


Dollar Edges Higher; Fed in Focus, Yuan Weakens as China Reopens

Related Articles

Dollar pares losses as Powell signals bond taper
Dollar pares losses as Powell signals bond taper By Reuters - Oct 22, 2021 4

By Karen Brettell NEW YORK (Reuters) - The dollar pared losses on Friday after Federal Reserve Chairman Jerome Powell said the U.S. central bank should begin reducing its asset...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email