World
FOREX-Dollar edges higher on geopolitical tensions ahead of the Fed
FOREX-Dollar edges higher on geopolitical tensions ahead of the Fed
The dollar edged higher on Tuesday to within striking distance of its two-week peak, as investors bought safe-haven currencies amid tensions between Russia and the West over Ukraine while awaiting the outcome of the Federal Reserve’s policy meeting.
The U.S. military put about 8,500 troops on alert to be ready to deploy to Europe if needed, in the latest effort to reassure jittery NATO allies in the face of a Russian military build-up near Ukraine.
“Much greater exposure of European economies to the crisis does not make the euro a particularly attractive vehicle to ride out the current storm,” ING analysts said.
The euro was down 0.2% at 0848 GMT to $1.1300, trading just off its lowest since Dec. 20 touched on Monday.
The dollar index was 0.1% higher at 96.02, just off its two-week high of 96.135 hit on Monday.
The safe-haven yen gained 0.3% versus the euro and 0.1% against the dollar, remaining within striking distance of its one-month highs.
The Swiss Franc was down 0.1% versus the euro at 1.0366, but not far from its highest since 2015, hit recently at 1.0298.
The Fed could firm up plans to raise rates and shrink its holdings of U.S. Treasury bonds and mortgage-backed securities that have swollen its balance sheet past $8 trillion at its meeting that ends on Wednesday.
Analyst views about the meeting are mixed, with Deutsche Bank flagging a potentially hawkish surprise over the months ahead, with the possibility the Fed raises rates in March and increases them as many as six or seven times this year.
But ING analysts say that if the Fed’s balance sheet reduction does the heavy lifting of policy normalisation, that could scale back forecasts for the number of rate hikes.
According to Commerzbank, “the markets are likely to remain nervous in the run-up to tomorrow’s meeting, but we do not expect any new insights.”
Money markets are pricing an 85% chance of a 25 basis point Fed hike in March and three more to 1.0% by year-end.
Bitcoin, which has almost halved in value since touching a $69,000 record in November, lost 2% to trade around $36,089. Meanwhile, ether, the world’s second-largest cryptocurrency, was down 2.7% at $2,377.
- News19 hours ago
Breaking: Tinubu Makes Fresh Appointment
- News16 hours ago
#USElection2024 Live Updates: Trump Vs Harris…Latest Results…Latest Polls
- Top Stories19 hours ago
Hardship: We’ll No Longer Watch Anyone Insult Tinubu – Doyin Okupe Vows
- Top Stories19 hours ago
#USElection2024: Trump, Harris close campaign in swing states on eve of deadlocked election
- Top Stories11 hours ago
Digital Transformation: Maida, Kekere-Ekun Speak At NCC’s Annual Workshop for Judges in Lagos
- Top Stories12 hours ago
Breaking: House Of Reps Finance Committee Visits FIRS
- Politics19 hours ago
‘He’s With Us’, EFCC Confirms Ex-Gov Okowa’s Arrest Over N1.3trn Diversion
- Entertainment19 hours ago
Prince Harry and Meghan Markle pursue separate projects