Tuesday, 15 October 2019 | 06:56 WIB

US Dollar Closes Stable Against Global Currencies

US Dollar Closes Stable Against Global Currencies

NEW YORK, NETRALNEWS.COM - The US dollar is closed almost unchanged against other major currencies at the end of trading Monday (Tuesday 18/6/2019 morning WIB), hovering near two-week highs as investors reconsidered the possibility of the Federal Reserve (Fed) dovish attitude at the week's policy meeting this.

The broader currency market is quiet, as traders are hesitant to take large positions before the Fed's two-day meeting, a meeting of policymakers of the European Central Bank (ECB) in Portugal, and the Bank of England (BoE) interest rate decision on Thursday (20 / 6/2019).

"It won't surprise us to see a bit of volatility entering this meeting, but in the end you will see people taking more wait and see approaches," said Charles Tomes, Portfolio Manager of Manulife Asset Management.

Expectations of a rate cut at the Fed's June 18-19 meeting have fallen to a 20.8 percent probability, according to the CME Group FedWatch tool. But bets for monetary easing at the July meeting remain high, with the market taking into account opportunities of 67.9 percent for cutting 25 basis points.

Slow job growth in May, dovish comments from members of the Federal Open Market Committee (FOMC), and weak inflation data last week, prompting increased interest rates.

"It might be guaranteed that you need a little interest rate cut. We think the pendulum has swung a little too far, too fast in the short term where the market has progressed itself in calculating deductions (interest rates)," Tomes said.

The US dollar index hit a two-week high of 97.603 on Monday (06/17/2019) but was last flat at 97.573. The euro was 0.07 percent higher at 1.122 dollars as investors awaited speeches from policy makers at a meeting of the European Central Bank in Sintra, Portugal, and data on euro zone inflation on Tuesday.

Against the yen, the US dollar was slightly stronger, last up 0.06 percent to 108.62.

Sterling slumped as low as 1.254 dollars, the weakest since January, heading for the lowest level of 2019. Investors worry that Boris Johnson, the strongest candidate to replace Prime Minister Theresa May, can put Britain on the path to an unconvinced Brexit.

The British central bank, the Bank of England, on Thursday (6/20/2019) will consider tightening monetary policy. Although BoE Chief Economist Andy Haldane said the central bank was nearing the time for Britain to raise interest rates, there were no major changes expected until the Brexit negotiations were completed, said Stephen Gallo, Head of the European Foreign Exchange Strategy at BMO Capital Markets.

"We estimate (the Monetary Policy Committee) to maintain a tightening bias to a certain level, although we will not rule out some moderate adjustments to recognize the deteriorating global background and weak economic conditions in the euro zone."