Dollar bounces after Fed decision while pound slides before BoE
Updates at 0840 GMT
By Harry Robertson, Sruthi Shankar and Ankur Banerjee
LONDON/SINGAPORE, Aug 1 (Reuters) - The dollar rallied on Thursday after falling the previous day as central banks continued to roil currency markets, while sterling hit a three-week low ahead of a finely poised Bank of England decision.
The dollar index =USD, which tracks the currency against six peers, was up 0.29% at 104.35. It fell 0.4% the previous day after the Federal Reserve held rates steady but opened the door to reducing borrowing costs in September.
Chris Turner, head of global markets at ING, said geopolitical tensions and a slowing global economy were likely supporting the dollar, a traditional "safe haven" for investors at moments of stress, even with the Fed heading for rate cuts.
"The geopolitical and the macro environment elsewhere in the world isn't actually great," he said. "Obviously we've still got some real tensions in the Middle East, and the manufacturing sector is seemingly in recession across large parts of Europe and in Asia."
Hamas leader Ismail Haniyeh was assassinated in Tehran on Wednesday, an attack that drew threats of revenge against Israel and fuelled fears of a wider Middle East war.
The euro EUR=EBS fell to a three-week low at $1.0782 and was last down 0.36% as the dollar picked up.
Investors' positioning ahead of a possible BoE rate cut later in the day was knocking the pound, spilling over to other currencies and supporting the dollar, said Lee Hardman, currency strategist at MUFG.
Japan's yen was roughly flat, with the dollar JPY=EBS at 149.87 yen.
The yen jumped around 1.8% the previous day after the BOJ raised rates for a second time this year. It rallied 7.3% in July, its strongest monthly performance since November 2022, after starting the month rooted near 38-year lows.
Intervention by Japanese authorities to boost the currency kicked off the move higher, combining with a narrowing of the U.S.-Japan interest rate gap to trigger an unwind of profitable carry trades, in which traders borrow the yen at low rates to invest in dollar-priced assets for higher returns.
STERLING SLIDES VERSUS DOLLAR
The pound GBP=D3 dropped 0.57% to a three-week low of $1.2779 ahead of a knife-edge interest rate decision by the Bank of England at 1100 GMT.
Traders think there is a roughly 62% chance the BoE lowers rates from a 16-year high of 5.25%, according to pricing in derivatives markets, similar to Wednesday and up from around 58% at the start of the week 0#BOEWATCH.
Sterling has fallen from a one-year high above $1.30 in mid-July as investors' views on BoE rate cuts have shifted.
Fed Chair Jerome Powell on Wednesday stressed that the central bank was also focused on keeping the labour market healthy, adding new emphasis to Friday's U.S. jobs report for July.
It is expected to show that employers added 175,000 jobs during the month, a step down from 206,000 in June. Data on weekly jobless claims is due later on Thursday.
Traders are now anticipating 72 bps of easing this year FEDWATCH. The Fed meeting "has bolstered market expectations that bigger rate cuts remain likely, and will be heavily influenced by how the economy progresses from here", said Charu Chanana, head of currency strategy at Saxo.
In other currencies, the Australian dollar AUD=D3 was 0.28% lower at $0.6518 after sliding 2% in July as it got caught up in the unwinding of carry trades.
World FX rates https://tmsnrt.rs/2RBWI5E
Japanese yen posts best month since November 2022 https://reut.rs/3YoXHLF
Reporting by Harry Robertson in London, Sruthi Shankar in Bengaluru and Ankur Banerjee in Singapore; Editing by Michael Perry, Miral Fahmy and Giles Elgood
Ativos relacionados
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
