By Chibuike Oguh and Greta Rosen Fondahn
NEW YORK/GDANSK (Reuters) -The U.S. dollar rose against major currencies on Monday, hovering near a three-week high, as markets await the Federal Reserve and other key central bank meetings for clues this week on the likely evolution of interest rates over the next three weeks. 2025.
Markets are confident of a quarter-point Fed rate cut at the end of Wednesday’s policy meeting, with the odds of such a cut at nearly 97%, according to CME’s FedWatch tool. The yield on US 10-year benchmark bonds fell 1.2 basis points to 4.387%.
“I don’t think the debate is about whether or not the Fed is cutting spending; it’s always about the future prospects,” says Eugene Epstein, head of structuring for North America at Moneycorp in New Jersey.
‘The dollar has gained considerable strength since the end of September. And that makes sense, since all our economic indicators are contrary to the Fed’s narrative in recent months of cutting rates and saying inflation is falling. in the desired direction and the labor market becomes weaker.”
The dollar strengthened 0.7% to 0.89320 against the Swiss franc, hovering around its highest level since July. Against the Japanese yen
The yen has struggled to recover against the dollar after its biggest weekly decline since September after Reuters and other news outlets reported the Bank of Japan was likely to keep rates steady at the end of its policy meeting on Thursday.
The euro recovered after German Chancellor Olaf Scholz lost a confidence vote in parliament, paving the way for early elections in February. The euro recovered after early session losses but pared those gains to fall 0.06% to $1.0496.
The decline in eurozone business activity eased this month, a survey showed, while European Central Bank President Christine Lagarde said on Monday the ECB will cut interest rates further if inflation continues to decline towards its target. 2%.
The currency, which tracks the currency against six others, rose 0.08% to 106.95 after rising as high as 107.16 during the session. The index stood at 107.18 on Friday, the highest level since November 26.
Sterling rose 0.70% to $1.26970 after losing ground on Friday to its lowest since November 27, as data showed a surprise economic contraction in the British economy.
A survey of business activity showed a rise in prices in Britain on Monday. The Bank of England will announce a policy decision just hours after the BOJ.
“If you look at how the dollar has performed, not only do you have the Fed sitting in a corner, but you also have a lot of major central banks going the other way with their own individual stories: the Bank of Canada Austerity, austerity by the Swiss National Bank, more than expected cuts by the ECB. Ultimately, there is only so much that can reverse the maintenance of the dollar’s current strength,” Epstein added.
hit an all-time high of over $106,000 after President-elect Donald Trump suggested he planned to create a US bitcoin strategic reserve similar to its strategic oil reserve, fueling the enthusiasm of crypto bulls.
Trump’s comments came in an interview with CNBC late last week and echoed other statements he made during his successful presidential campaign that were seen as positive for the crypto industry. Bitcoin rose to 106,858 on Monday. It was last up 5.23% at $106,645.00.
