The dollar stabilized against a group of currencies, today, Wednesday, as investors evaluated calls from officials at the Federal Reserve (the US central bank) to be patient and await the announcement of the minutes of the bank’s monetary policy committee meeting, in anticipation of more indicators on the path of interest rates.
But the New Zealand dollar jumped after the Reserve Bank of New Zealand (the central bank) raised its forecast for peak interest rates at its latest monetary policy meeting.
With no significant other factors guiding the market regarding economic data this week, the major currencies continued to move in a narrow range.
- The dollar index was largely stable against a basket of currencies at 104.65, after a brief rise to 104.76 yesterday evening.
- The New Zealand dollar jumped to 0.6152, its highest level since last March 14, and recorded in its most recent transactions an increase of 0.4% against the dollar to $0.6117.
- The British pound rose 0.22% to $1.2735, and was not far from the highest level in two months it touched yesterday, Tuesday.
- The euro fell at $1.0852.
- The yen rose against the dollar by 0.15% to 156.40.
gold
Gold prices declined, but remained hovering above the $2,400 level, as investors awaited the release of the Federal Reserve’s minutes on monetary policy, searching for new indicators about the possible timing of reducing interest rates.
Gold fell in instant transactions by 0.22% to $2,415.28 per ounce, after reaching a record level of $2,449.89 on Monday.
The minutes of the US Central Bank’s May monetary policy meeting are scheduled to be released at 18:00 GMT today, and traders currently expect 64% of a rate cut by September.
Recently issued data showed that US inflation has resumed its downward trend, but policymakers at the US Central Bank said on Tuesday that the bank must wait several more months to ensure that inflation actually returns to the path of decline to the targeted 2% before it reduces interest rates.
Low interest rates and geopolitical uncertainty enhance the attractiveness of investing in gold.
Tim Waterer, chief market analyst at KCM Trade, said that gold prices will remain above the $2,400 level, amid anticipation of an interest rate environment that may be more flexible later in the year, but rising to new record levels may require a decline in the dollar or bond yields or… Increased demand for the precious metal.
