Around 11:30 a.m. in Paris, the greenback lost 0.29% to 1.0664 dollars for one euro and 0.27% to 1.2400 dollars for one pound.
The dollar was trading near its lowest since June once morest the euro on Wednesday, awaiting the monetary policy decision from the US Federal Reserve (Fed) following European trading ended.
Around 10:30 a.m. GMT (11:30 a.m. in Paris), the greenback lost 0.29% to 1.0664 dollars for one euro and 0.27% to 1.2400 dollars for one pound.
The foreign exchange market is preparing for the end of the Fed meeting on Wednesday evening, then for the monetary policy decisions of the Bank of England (BoE) and the European Central Bank (ECB) on Thursday.
Hikes of 50 basis points are expected from the three major central banks, and leaders’ comments will be scrutinized to see how fast the fight once morest inflation will continue in 2023.
“We expect Fed boss Jerome Powell to speak at his press conference regarding the risks to economic growth but also the need to bring inflation” to its 2% target, comments Kristina Clifton, analyst at Commonwealth Bank of Australia.
“If the focus is on economic growth, it might weigh on the dollar,” she adds.
On the euro zone side, it will be necessary to monitor growth forecasts, judge Geoffrey Yu, of BNY Mellon: if growth were to contract markedly, “it would be difficult to justify a rate hike in the midst of a recession, even with high inflation” , he notes.
Finally, in the United Kingdom, the BoE will have had little time to digest the inflation data published on Wednesday morning.
In November over one year, inflation slowed to 10.7% but remains close to 40-year highs reached the previous month at 11.1%.
“This is more than five times the BoE’s 2% target, there is still a lot of room before we can talk regarding a rate cut,” warns ADSS analyst Srijan Katyal.
