Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Dollar Rebounds After Fed Announces Tapering; Bank of England Meets

Forex Nov 04, 2021 04:05AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
EUR/USD
+0.02%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GBP/USD
-0.07%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/JPY
+0.03%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/PLN
+0.06%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
EUR/PLN
+0.15%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/CZK
+0.08%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Peter Nurse

Investing.com - The dollar traded higher Thursday, rebounding from the previous session’s losses after the Federal Reserve said it was in no rush to raise interest rates after it began tapering its bond-buying program.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 94.088, climbing after Wednesday’s near 0.3% fall.

Additionally, EUR/USD fell 0.3% to 1.1577, giving up Wednesday’s gains, while USD/JPY rose 0.2% to 114.25, not far from the multi-year high of 114.69 hit last month.

The Fed announced late Wednesday that it would reduce its $120 billion monthly bond-buying program by $15 billion initially, as widely expected, but Chairman Jerome Powell said the U.S. central bank would be "patient" in deciding when to raise its benchmark overnight interest rate from near zero levels. 

The dollar weakened Wednesday with traders judging Powell’s comments as being dovish, given that inflation currently stands at 30-year highs. However, it has since rebounded.

“The fact that the dollar continues to trade near its recent highs against EUR and JPY should be a reminder that: (a) EUR and JPY look better funding currencies than the dollar and (b) that the Fed has fired the starting gun on policy normalization, eventually tighter dollar liquidity, higher US rates and what should be a stronger dollar,” said analyst at ING, in a note.

Elsewhere, GBP/USD fell 0.2% to 1.3657, down from its week high of 1.3698 hit earlier Thursday, as traders positioned for a Bank of England policy-setting meeting later in the session.

Markets are pricing in a rate rise from the U.K. central bank on the back of surging inflation, which would be the first rate hike from the world’s major central banks since the start of the Covid-19 pandemic. That said, the decision is likely to be a close call as economic growth is starting to slow.

“GBP has corrected a little this week already and we suspect that it may have a little further to go should it appear that Governor Bailey does not carry at least 8 of the nine member MPC with him in voting for a 15bp rate hike,” added ING.

USD/PLN traded 0.5% higher at 3.9608 and EUR/PLN also gained 0.1% at 4.5835 the day after Poland’s central bank raised its key interest rate by three quarters of a percentage point, more than expected, to try and combat surging inflation.

USD/CZK rose 0.3% to 22.0000 while EUR/CZK dropped 0.1% to 25.4570 ahead of a meeting of the Czech National Bank, which is expected to result in another rate hike.

The central bank delivered a 75-basis-point hike in September, its biggest since 1997, to combat rapid price growth, and is expected to deliver something similar later Thursday.

 

Dollar Rebounds After Fed Announces Tapering; Bank of England Meets
 

Related Articles

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 Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
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?
 
Post
 
Replace the attached chart with a new chart ?
1000
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 Investing.com'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
Continue with Google
or
Sign up with Email