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Dollar back on track as ECB set to meet tomorrow

2019-09-11 20:00    FXYEAH

Dollar back on track as ECB set to meet tomorrow Forex News

The US dollar managed to regain some of its previous ground on Wednesday.

The currency, which earlier in the week suffered from a slight move by traders towards riskier currencies, rose a little as trading got underway.

In a sign that risk was well and truly off the table, the so-called safe haven Japanese yen slid to a low point of 107.65 in its pair with the US dollar – which was its worst performance since the first day of last month.

This came after traders’ attention was focused almost entirely on the European Central Bank’s meeting, which is due to take place tomorrow and which will be watched with interest.

It is expected at this meeting that interest and deposit rates could be lowered and that this could cause a domino effect for the other central banks due to meet soon.

One of these is the US Federal Reserve, which will meet next week.

The dollar was also boosted by claims earlier in the week by US treasury secretary Steven Mnuchin that the US was in a position to negotiate with China over the ongoing trade row that is causing economic problems for the two nations.

It is now understood that representatives of the two countries are set to meet in the US capital of Washington, DC next month.

However, not even a statement from one of Donald Trump’s trade advisors that the markets should wait and “let the process take its course” could cause problems for the dollar.

Despite its strong performance in most pairs with risky currencies, the US dollar did not manage to surge against the Australian dollar.

That currency was selling for $0.6860 at one stage.

However, it was a mixed picture for the global markets more generally.

This came in part due to economic data releases which suggested that demand is not on the rise around the world.

According to some analysts, there is little further that central banks around the world can do when it comes to enacting stimulus packages.

With some of the world’s leading central banks now either providing interest rates which are lower than zero or are at least looking at doing so, there is plenty of evidence to support this assumption.

The British pound continued to ride high.

In its pair with the US dollar, it was seen at $1.2353 at one stage on Wednesday morning – which represented a firmness.

The pound, which has seen catastrophic losses over the course of the year due to fears about Brexit, managed to cling on thanks to a bill passed by the country’s parliament.

This bill prohibits Boris Johnson, the prime minister, from taking the country out of the European Union without a deal on 31st October.

Johnson is also now compelled by law to ask the bloc for an extension on 31st October.

The single European currency, for its part, did not rise or fall significantly over the course of the day.

In its pair with the US dollar, it was recorded at $1.1047.

ECB

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