FOREX
The US dollar is trading mainly flat in relation to other major currencies as the European session gets underway. A senior Federal Reserve official speaking on Wednesday alluded to ongoing concerns over inflation and the central bank’s commitment to bring it under control. These comments were seen as hawkish and came at a time when worries over the US banking sector have started to fade, cementing expectations of a 25 basis points rate hike in May, which will be followed by a pause likely to last beyond the end of the year. However, other scenarios are also being considered by investors, with some predicting an economic contraction in the second half of 2023, forcing the Fed to cut rates before year-end. Against this background, the US dollar is struggling to find short term direction, with further losses expected in relation to other majors, such as the euro, as the year progresses and the monetary policies of the respective central banks continue to diverge.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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