Investing.com – In the European market on Monday (30th), the U.S. dollar index was consolidating. Investors are waiting for the monetary policy meetings of several central banks this week to assess the fate of this round of tightening cycle.
The Federal Reserve will announce its latest monetary policy on Wednesday (February 1), local time, while the European Central Bank and the Bank of England will announce the results of their meetings on Thursday (February 2).
All three central banks are expected to raise interest rates further, but the future path remains unclear as inflation recedes and growth momentum ebbs.
Currently, the market expects a rate hike of only 25 basis points to 4.75%, while officials have hinted at a 0.5% hike, taking the euro zone deposit rate to 2.5% and the refinancing rate to 3.0%. Opinions were mixed, however, on whether a 25 or 50 basis point hike would be expected.
ActivTrades analyst Frank Sohlleder warned on Monday: “There are more and more signs that the opinions of the market and the Fed are becoming more and more distant. There is still some way to go before inflation falls below 2 percent.”
Ulrich Stephan, a strategist at Deutsche Bank, also pointed out that interest rate futures currently expect the Fed to cut interest rates by 0.4% by the end of the year. This expectation is at odds with the recent guidance of most Fed officials. stay above 5%.
The strategist also noted that the 3.3 percent ECB deposit rate implies a terminal rate that is also slightly lower than ECB officials suggest.
As of 17:30 Beijing time (04:30 am ET), the dollar, which measures the dollar’s trade-weighted strength against six major currencies, was down 0.08% at 101.640 and down 0.04% at 101.89. While markets in mainland China were closed last week, the U.S. dollar index was nowhere to be found.
Meanwhile, the benchmark U.S. bond yield was at 3.537%, at 2.951%.
It fell 0.42% to 6.7548; rose 0.01% to 6.7565.
It rose 0.27% to 1.0896 and fell 0.04% to 1.2393.
[This article is from Yingwei Caiqing Investing.com, to read more, please log in to cn.investing.com or download Yingwei Caiqing App]
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Compiler: Liu Chuan