The dollar retreated as traders awaited central bank decisions
The US dollar fell against a basket of currencies on Monday but remained close to a six-month high as traders awaited interest rate decisions this week from the Federal Reserve, Bank of England and Bank of Japan.
The dollar index, which measures the currency against six major rivals,
fell 0.1% to 105.15, not far from a six-month high of 105.43 touched on Thursday.
The index rose for the ninth week in a row last week, its longest winning streak in nearly a decade.
There were several reasons for the dollar’s retreat on Monday,
including disappointing economic data from the United States and expectations
that the Fed will raise interest rates by only 25 basis points on Wednesday,
instead of 50 basis points as previously expected.Michael Brown, a market analyst at Trader X, said:
“The large number of event risks and upcoming central bank meetings are suppressing volatility,
and traders are not really keen to chase moves or take on significant risks ahead of the Federal Open Market Committee,
the Bank of England, the Bank of Japan, etc.”
Look at the currencies
The euro rose The euro rose 0.23% against the dollar to $1.0683.
The European Central Bank raised interest rates to 4% last week,
but said that this may be the last hike.
The yen rose
The yen rose about 0.15% against the dollar to 147.62 yen per dollar,
with traders leaving for a public holiday in Japan.
The pound fell
The pound fell 0.02% to $1.23805. Traders expect the Bank of England to raise interest rates by 25 basis points to 5.5% on Thursday, which could be its last hike.
Bitcoin rose
In cryptocurrencies, Bitcoin rose 1.02% to $26,806, its highest level in more than two weeks.
The dollar retreated as traders awaited central bank decisions
The euro rose 0.21% to $1.0752, extending gains from a low of $1.0686 last week, its lowest since mid-June.
Its last rise was to $1.0736, with major moves being restricted by the upcoming ECB meeting.
Expectations for the meeting are split between a pause and a 25 basis point rate hike,
with market pricing leaning towards a rate hike.
“Looking at market pricing, the euro will fall more if the ECB keeps rates unchanged compared to rising if rates are hiked,” said Christina Clifton, foreign exchange strategy and economics analyst at the Commonwealth Bank of Australia.
Clifton added that the ECB will also release an updated set of economic forecasts,
and the ECB’s views on how quickly inflation will fall will guide the market on how much further tightening is likely.
Elsewhere, the pound sterling was flat at $1.2486, the Japanese yen rose 0.1% to 147.29 per dollar,
and the Swiss franc held steady at 0.8934 per dollar.
The Australian dollar rose 0.54% to its highest level since September 5 at $0.64545 after data showed the economy added 64,900 jobs in August.
The Swedish krona briefly touched a new all-time low of 11.967 per euro after data showed the pace of Swedish core inflation slowed more than expected in August.
Developments of the failure of the “Mask” acquisition of “Twitter” due to its payment of compensation to one of the whistleblowers
The billionaire businessman and investor “Elon Musk”
is in the process of acquiring the social media platform “Twitter,”
and while it has been beset by numerous issues
that have brought it before a court for resolution,
a fresh obstacle has now emerged,
according to Musk’s most recent announcement.
The fact that “Twitter” erred by paying $7 million
to one of the whistleblowers raises many questions
and is another reason why the agreement was terminated.
Musk was seeking to complete the acquisition of Twitter,
but he was exposed to some things,
most notably the number of fake accounts and also bot accounts
among the more than 230 million users of the platform,
which Musk described as misleading investors, but on the other hand,
Twitter believes that Musk is seeking to abandon his
promises to implement his takeover of the platform.
Twitter did not notify Musk of paying compensation
And Musk’s lawyers said in a statement that the Twitter acquisition deal obliges
the platform to notify the buyer before it pays $ 7.75 million
as part of its plan to terminate the contract
with the company’s former security chief, Peter Zatko,
and that they only learned about this after submitting documents to the court.
by “Twitter”on September 3 regarding the termination of the agreement with “ZATCO”.
litigation
The two parties are currently awaiting the trial scheduled for October
after the Twitter platform filed a lawsuit against
Musk in order to force him to implement the acquisition deal,
and Musk’s lawyers also added Zatko’s testimony
before the court in order to demand his testimony. Regarding security and privacy issues and the number of bot accounts on the platform
Twitter was silent and did not respond to the comment regarding Musk’s request
to withdraw the offer made to buy Twitter at $54.20 per share,
accusing it of violating the terms of the acquisition agreement.
artical name Developments of the failure of the Mask
German central bank expectations for continued interest rate increases
Despite high inflation and the risks of the recession that are approaching further,
the head of the Bundesbank said on Sunday the need to
add more increases in interest rates in the euro area,
adding that the move taken by the European Central Bank on Thursday
to increase interest rates by about 0.75 percentage
points last Thursday is a very important sign,
and may continue to increase as long as the current situation
of inflation has not yet improved in the coming period,
as current indicators show the extent of inflation spreads in many areas of the economy.
It also indicates that inflation in Germany by the end of this year may reach 10%,
which is the same period that we are expected to see the maximum rise in inflation,
and that it expects a further decline in inflation during the next year 2023,
but it will remain at levels considered high, which are higher than 6%.
artical name Developments of the failure of the Mask
Germany seeks to save energy market to avoid bankruptcy wave
Many statements by officials in Germany came about a fundamental decision to avoid a wave of bankruptcy
that it may suffer if it does not interfere in the energy market
and saves the status quo, and that the bill must be paid under any circumstances and we await
the situation very carefully because we may see cases of bankruptcy and unemployment.
At the European level, EU energy ministers are seeking to speed up the implementation of decisions
that would calm up high gas prices and also try to provide liquidity to traders.
On the Russian side, it decided not to export any quantity to countries that
have been in solidarity with the policy set by the European Central Bank,
which would set a specific ceiling on Russian gas prices.
But the German chancellor said in remarks last Saturday
that his country would be ready to face any Russian gas outages,
at a time when the crisis is exacerbated by weak supplies from Russia.
Germany’s energy crisis has increased its imports of chemicals
The energy crisis experienced by Europe and Germany in particular
caused an increase in the cost of manufacturing chemicals
and thus reduced manufacturing. Here,
imports of chemicals increased by about 40% this year compared to the previous year,
when about 2.8 billion tons of inorganic chemicals were imported.
This effect illustrated the depth of the crisis in Germany due to the energy crisis
as a result of its heavy dependence on Russian gas,
which led to a weakening of domestic production in general in the country.
artical name Developments of the failure of the Mask
Will the Euro wake up again
Will the US markets surrender to the Fed after raising 450 points?
This is what we will discuss
and what…
This is what the members of the Federal Reserve were thinking at the time,
but not alone. All investors and entrepreneurs also had this question in their minds.
What after the energy crisis paralyzed the country’s economy?
What after the worsening of its inflation,
which is sweeping Europe? What after the rise in the price of
the dollar and hitting the euro at a bottom it hasn’t seen for years?
Which prompted the Federal Reserve to speed up budget setting this month,
although quantitative tightening may affect the economy
and make the stock and bond market more brutal in the coming months,
which terrifies investors.
This prompts them to reduce stocks,
with caution that the process can combine with other factors such as interest rates
and the rise in dollar prices to increase pressure on asset prices and harm economic growth.
Phil Orlando,
the chief strategist for the stock market
(New York Stock Exchange. FHI), said that the current recession
and crisis are prompting the Fed to accelerate the quantitative tightening of the decline in stock prices
and increase bond yields, which recently increased to their highest level in 20 years.
For fear of engaging in the dangers of an economic recession sweeping the country
Which prompted the Fed to announce some of the Treasury bonds
and mortgage-backed securities that it held in June at a rate of 47.5 billion dollars,
and said that this month it increased the pace of quantitative tightening to 95 billion dollars.
We do not forget the epidemic crisis that prompted the Fed to nearly double its budget to $9 trillion,
but the size of the federal abandonment that it is making has never been seen before,
making it difficult to determine its effects on the bank’s impact on its role as a passive
and price-insensitive buyer of Treasury bonds in asset prices simultaneously.
With current events and quantitative tightening.
artical name Developments of the failure of the Mask
For its part,
the Fed was affected by the tighter monetary policies on stocks and bonds in 2022,
as the S&P 500 index fell by 14.55 percent,
while the yield on ten-year US bonds is moving in
the opposite direction with prices recently reaching 3 30%,
after an increase of 182 basis points for this year.
The US economy did not show any reaction to the rise in interest rates
but rather remained resilient in the face of the increase,
which pushes economists to break their silence,
as they expect a recession next year if these monetary tightenings continue,
as the Federal Reserve expected that the central bank may reduce 2.5 trillion of its holdings.
By 2025, which made economists a difference of opinion.
Orlando of Federated Hermes said:
Every trillion in the Fed’s balance sheet cuts would equate
to an additional 25 basis points in this implied price hike,
and Ian Lingen, head of US price strategy for DPR Capital,
said that up to 75 basis points could be added until
the end of 2023 only as a limit. lowest.
David, chief investment officer for the Americas, also said that Europe’s energy crisis,
the pace of interest rate hikes by the Fed, and a possible US recession,
were likely to outpace quantitative stress as a market driver at the time.
The topic was addressed by Tadesse,
who believes that the S&P index could fall to the 2900-3200 range due to quantitative tightening.
Solomon Tadesse, head of the quantitative strategy in North America, also believes
that the Fed will fall at the end of $ 3.9 trillion from its balance sheet,
which is equivalent to 450 basis points, and the Fed has already raised rates by 225 basis points,
and another increase is expected. By 75 basis points during this month approximately.
And the matter remains foggy for investors
who are watching the market’s movements this week in
anticipation of consumer price data for the month of August,
awaiting indications that whether inflation has reached its peak or that there are many.
This has been set next September21 as the date for
the Federal Reserve to hold a monetary policy meeting
artical name Developments of the failure of the Mask
