The dollar stabilized Wednesday before the meeting of the American federal reserve which must determine the policy to be carried out in an uncertain economic context, while the main Asian investors continued to get rid of their American assets.
The announcement of the outfit of talks between the United States and China on Saturday appeased fears of a trade war that has shaken the confidence of investors in the dollar and the American markets. The president of the Fed, Jerome Powell, should indicate that more data is necessary before deciding the next measure to be taken by the American central bank.
The sale of dollars, which had been fueled since last week by investors around the world, in particular those of emerging markets with low yield, who got rid of this motto or repatriated their funds, seemed to have calmed down.
The record increase in the Taiwanese dollar has spread, this week of a strong appreciation of the currencies in Singapore, South Korea and elsewhere in Asia this week.
The Taiwanese motto has jumped more than 10 % compared to the US dollar since the announcement by US President Donald Trump, on April 2, of generalized customs duties on the products of its business partners. It weakened 0.65 % on Wednesday.
The South Korean Won reached its highest level in six months at the opening on Wednesday, before retreating.
The Yuan weakened after the China’s announcement of a long -awaited drop in its interest rates.
The Governor of the Chinese Central Bank said on Wednesday that the bank would reduce the amount of the mandatory banks’ reserves, the first decrease since 2025, in order to support the second world economy in a context of latent trade war.
The Dollar Index has changed little after deciding 0.2 % on Tuesday, its third consecutive decline. The euro fell slightly 0.2 % to 1.1340 dollars, abandoning part of its earnings after the election of Friedrich Merz to the German Chancellery.
The Fed should maintain its benchmark interest rates unchanged on Wednesday. Traders are betting on a resumption of the monetary easing cycle in July, but some economists believe that high inflation will prevent any drop in rates this year.
-The term contracts on American actions have passed in positive territory after Washington officials announced that the Treasury Secretary Scott Bessent and chief negotiator Jamieson Greer would meet the highest Chinese economic official on Saturday. Trump said on Sunday that some trade agreements would be announced this week.
“There was a change of course after the closing of the American markets, the government having announced that it would start commercial negotiations with China this week. Let’s see if it holds, “said Jessica Amir, market analyst at Momooo, a trading platform.
“Gold has now increased by 31 % this year and should continue to climb if the US dollar continues its decline,” she added.
The currency markets seemed a little quieter on Wednesday after a spectacular leap of 10 % in two days of the Taiwanese motto.
The Hong Kong dollar has been negotiated slightly below its highest level and the Japanese Yen was weakened by 0.4 %, ending three days of consecutive increases, while Japanese markets reopened after two days off.
“We share the opinion expressed on the market according to which the extreme volatility observed in recent days on the Taiwanese exchange market is an alert signal,” wrote George Saravelos, a global manager of currency research at Deutsche Bank.
“Self-realizing movements could occur on other currencies where institutional investors are found with a large surplus of non-covered USD positions. The Japanese yen immediately comes to mind. »»
About 33,000 billion US dollars are invested in the US markets, including 14,600 billion in the form of a debt at the end of 2024, and only a small fraction is covered against the volatility of currencies.
The Japanese GPIF pension giant and life insurance companies are among the main owners of American assets. The country’s exposure to dollar markets amounted to around $ 2,000 billion at the end of 2023.
A stronger yen is unfavorable to their yields, as this means that investors will finally take less yen by dollar.
