The US dollar index or DXY consolidated in the range of 99.50s at the beginning of the European session. That was happened after the release of the minutes from the FOMC meeting some days ago.
The minutes showed the readiness of Federal Reserve officials to act aggressively in tackling the rising inflation which is happeebd. Thus, it is also supporting the appreciation of the US dollar.
On the other hand, the euro faces a new threat from the heating up of the French political temperature recently. The FOMC meeting minutes revealed that there are so many members agree to increase the interest rate.
The amount is around 50 basic point in several months ahead. They are signalling an agreement for the asset downsizing plan for about $95 million ber month from the central bank balance sheet that has swelled during the pandemic.
The USD Index doesn’t Experience a Sharp Rise
Generally, these overviews are in line with the market expectation. That is why; it doesn’t trigger any significant rise within the US Dollar index. However, there is one more thing.
It must be noted that the monetary tightening step will be realized from May and it has a chance to support The USD appreciation in the future. The meeting minutes also gave their support.
It is especially to a view that the hawkish peak has not been reached yet in the Fed. That was said by an analysts from the OCBS BANK OF singapore. In that context, risk – reward supports the strengthening dollar.
That is for the middle – term period or at least it supports the American dollar to survive know a supported position. For the information, the USD index is passing through the 99.40 / 50 resistance.
The Commodity Currencies are Corrected too
It is possible that the USD position increases again and reach the level of 100.00. Further more, the commodity prices were also corrected ahead of that FOMC meeting minutes release.
That was still happened although the central Bank of Australia has been declaring their plan recently to raise the interest rate as soon as possible. Meanwhile, the USD / JPY maintain it’s high position.
That is around the level of 123.80. In the other side, the EUR / USD was seen in a low level of 1.0895. The Central Bank of Japan or BOJ and european central Bank (ECB) are the two most dovish monetary authority.
It is especially between the major central banks in the world. The next major pairs traders will check the ECB meeting minutes in March several hours ahead. The result may describe the plan to solve the rising inflation amidst a recession risk.
The Russia – Ukraine War is still Highlighted Until Now
Several important incidents in the world such as the Russia – Ukraine war and the president election in France are also highlighted. The result of that election is so essential for some parties.
So far it can be known that the voting of the President Candidate from the Eurosceptic group, Marine Le Pen, is increasing. It reaches a narrow margin with the incumbent Emmanuel Macron.
This sparked a little concern ahead of the vote at the weekend. A eurosceptic president has the potential to shake up the unity of the European Union and the Eurozone as well.
Elsewhere, the Gold prices closed higher at the weekend, shrugging off the U.S. Dollar which faced uncertainty at the peak of its rally. The Spot of gold rose by 0.5% to $1941.94 an ounce.
Meanwhile the gold futures on the New York Comex increased by 0.4% to $1945.6. The XAU/USD chart shows the close of the gold price at $1945.80, up 0.77% from the daily opening level.
