US Dollar Steady as Markets Wait For BOJ, BOC Meetings This Week
Aiswarya Gopan • 1 min read
The US dollar has reversed some of its recent losses and is trading steady early on Friday as investor focus shifts from the Fed towards other central banks that are scheduled to hold meetings in the coming sessions. At the time of writing, the US dollar index DXY is trading around 93.94.
Later this week, markets’ attention will turn towards Europe with the upcoming ECB meeting in focus. Although, not too many surprises are expected there, with the central bank expected to continue with its dovish outlook.
The next key data point worth watching will be the release of US GDP which could spur some volatility in the US dollar. Ahead of Fed’s upcoming plans to start easing back on its monthly asset purchase program, investors will closely follow the GDP data for hints on when the Fed could implement more monetary tightening measures post-pandemic.
In addition, investors will also eye Bank of Japan and Bank of Canada meetings, both scheduled within this week. All eyes will be on how policymakers around the world react to high inflation, and if they would start tightening monetary policies or undertake any other measures to offset inflationary pressures’ impact on the economic recovery underway in their respective nations.
Traders will also keep a close watch on BOE and RBA meetings scheduled next week, especially after both the UK and Australia have registered an uptick in inflation lately. Markets expect a 60% likelihood that the BOE will hike interest rates, keeping GBP/USD supported even as other major currencies experience some pressure against the US dollar at present.