With the Bank of Japan policy decision out of the way, markets can zero in on the US Federal Reserve Bank’s next meeting which concludes tomorrow. Janet Yellen, the chief of the Fed, is expected to affirm markets that US interest rates will continue to rise in the months ahead. Analysts believe that the Fed is likely to say that global weakness won’t dent the Fed’s resolve for higher rates. That is, of course, provided the US labor situation remains strong and the inflation outlook continues to improve. Last year, Yellen had assured markets that 2016 would usher in several rate hikes and markets are anxiously awaiting the next.
As reported at 9:43 am (GMT) in London, the EUR/USD was trading at $1.1093, down 0.10%; the pair has ranged from a session trough of $1.1083 to a peak of $1.1121. The US Dollar Index was higher at 96.716 .DXY, a gain of 0.10%. FX traders use the Index to assess the relative strength of the greenback in comparison to a weighted grouping of major rivals.
Aussie and Kiwi Pressured
Antipodean currencies were under pressure in spite of some recent improvement in China’s economic data. Analysts say that two things are a factor for the Aussie and Kiwi Dollars. The first is the prices of commodities, especially oil and industrial metals, which have tumbled yet again. The second could be some contagion from the sentiment generated by the latest report from the Bank of Japan which painted an overall gloomy picture. The AUD/USD was down 0.61% to $0.7464 while the NZD/USD was down 0.21% to trade at $0.6655.
