London (AWP/AFP) – The dollar stabilizes Tuesday, after significant losses on Monday, especially against Asian currencies, pending a general policy of the American Federal Reserve (Fed) where no change in rate is expected.
The markets have their eyes riveted on the next FOMC (Fed Monetary Policy Committee) on Wednesday, “where the president of the Fed, (Jerome) Powell is largely expected in the political pressures exerted by the Trump administration in favor of a drop in rates,” said Stephen Innes, analyst at SPI AM.
“However, this position of data based on data is already integrated into the market, which suggests an immediate limited impact on the foreign exchange market,” said the analyst.
The recent employment data, more favorable than anticipated, tempered expectations in terms of dropping rate of the Fed, including “at the next FOMC meeting in June,” said Lee Hardman, analyst at MUFG.
Around 10:10 a.m. GMT (12:10 p.m.), the greenback lost barely 0.02% against the euro, at 1.1316 dollars, and abandoned 0.19% in the book, to 1.3322 dollars.
On the other hand, certain Asian currencies, such as the new Taiwan dollar and the South Korean Won, are down after having increased sharply in previous sessions, especially against the dollar.
-The new Taiwan dollar lost 0.70% and the South Korean Won fell 0.72% against the greenback.
Rumors of upcoming trade agreements with the United States had first initiated a movement of strong increase in these currencies during previous sessions.
But “in Taiwan, the central bank yesterday held an emergency meeting in which the governor said that market comments had caused an excessive + Taiwanese dollar purchase by exporters and foreign investors,” said Hardman.
The magnitude of the new Taiwan dollar movement, which had gained more than 7% in two sessions, “however suggests deeper structural changes than simple speculation,” said Innes.
According to him, companies and Taiwanese life insurance companies, which notably hold numerous assets denominated in dollar, seek to diversify in relation to exposure to the greenback, in response to the recent weakness of the latter.
Cours de mardi Cours de lundi 10H10 GMT 21H00 GMT EUR/USD 1,1316 1,1315 EUR/JPY 162,12 162,59 EUR/CHF 0,9345 0,9303 EUR/GBP 0,8495 0,8509 USD/JPY 143,26 143,70 USD/CHF 0,8258 0,8222 GBP/USD 1,3322 1,3296
AFP/JH
