© Reuters. Illustrative image of US dollar and Japanese yen banknotes from the Reuters archive.
NEW YORK (Reuters) – The US dollar fell against a basket of major currencies on Tuesday, amid expectations that the Federal Reserve (US central bank) will slow the pace of interest rate hikes when it meets Wednesday to assess the impact. of the increase on the economy.
Investors broadly expect the Federal Reserve to raise its key interest rate by 75 basis points to a range of 3.75% to 4%, the fourth consecutive increase of its kind. However, futures markets are split during the December meeting, with expectations hovering between a 75 or 50 basis point hike.
“There is some optimism that there may be a change of language following the Federal Open Market Committee meeting this week, which could indicate an upcoming slowdown,” said Evan Asensio, head of FX risk advisory at Silicon. Valley Bank of San Francisco.
In Britain, the Bank of England is expected to raise interest rates by 75 basis points at Thursday’s meeting, before slowing the rate hike to 50 basis points in December.
In afternoon trading, it fell 0.4% to 148.20.
The pound was up 0.1% to $ 1.1479, after falling more than 1% on Monday. And it fell to $ 0.9878.
The dollar index, which measures the performance of the US currency against six rival currencies, including the euro, the British pound and the yen, fell to 111.49 on Tuesday.
It has risen more than 15 percent since the beginning of the year in light of a significant increase in interest rates by the Federal Reserve, which has led to significant falls in other currencies and increased pressure on the global economy.
The Australian and New Zealand dollars rose from their lowest levels in a week in an overall improvement in market sentiment.
However, the Aussie dollar trimmed gains after the Reserve Bank of Australia decided to stick to a slower pace of rate hikes despite the sudden jump in inflation to a 32-year high in the third quarter.
The Australian dollar was $ 0.6397, unchanged, while the New Zealand dollar was up 0.5% to $ 0.5840.
(Prepared by Marwa Gharib and Muhammad Ali Farag for the Arabic Bulletin – Edited by Mustafa Saleh)
