London (awp/afp) – The dollar lost ground on Tuesday after statements by an official of the American central bank (Fed) in favor of a rate reduction at the December meeting.
Around 11:05 a.m., the American currency returned 0.19% to the euro, to 1.0519 dollars, and fell 0.15% against the pound, to 1.2675 dollars.
Christopher Waller, one of the governors of the American Federal Reserve, said on Monday he was in favor of a further cut in rates at the next meeting, rather than the status quo, despite the rebound in inflation in the United States .
“I am currently leaning in favor of lowering the key rate at our December meeting,” he said during a conference at the American Institute for Economic Research in Washington.
In the process, investors reinforced their bets on a rate cut of a quarter of a percentage point at the next meeting to be held on December 17 and 18.
On Monday, this probability “closed at 76%, up 10 percentage points from Friday,” note Deutsche Bank analysts.
The Fed’s main rate is currently in a range of 4.50 to 4.75%, having been lowered twice since September, by half a point and then by a quarter of a percentage point.
The PCE index in the United States, a reference indicator for inflation that the Fed wants to reduce to 2%, had nevertheless rebounded in October to 2.3% year-on-year, compared to 2.1% year-on-year in September.
But the monetary institution now seems to be more concerned about the impact of high rates on the labor market.
Clues on this subject will be provided by the monthly report of the Ministry of Labor on job creations in November, published Friday, preceded by another on resignations and job offers, Tuesday (JOLTS), and that of the ADP firm , Wednesday.
As a result of these declarations, the euro is partially recovering its losses from the day before due to the critical situation in France of Prime Minister Michel Barnier, who risks falling this week after taking responsibility for the Social Security budget.
Two motions of censure against his government, one tabled by the left-wing New Popular Front alliance and the other by the far-right National Rally (RN) party, will be debated on Wednesday afternoon.
Unless the situation turns around, the first, supported by the RN, should be adopted, leading to the fall of the current government.
These developments reinforce “political uncertainty in France” and fuel doubts about “the capacity and willingness of the government to put in place the fiscal consolidation measures necessary to reduce the budget deficit by around 6% of GDP this year “, summarizes Lee Hardman, analyst at MUFG.
Cours de mardi Cours de lundi ---------------------------------------------- 10H05 GMT 22H00 GMT EUR/USD 1,0519 1,0498 EUR/JPY 157,61 157,06 EUR/CHF 0,9312 0,9307 EUR/GBP 0,8299 0,8295 USD/JPY 149,83 149,60 USD/CHF 0,8852 0,8865 GBP/USD 1,2675 1,2655
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