After a dovish Fed, the dollar stays strong while the yuan struggles with real estate issues.
World- Stock Market News
Dated:-25-09-2023
With markets still processing last week's round of central bank interest rate decisions, the U.S. dollar started the new week on solid ground, rising to within a hair of its six-month high.
The Dollar Index, which measures the value of the dollar in relation to a basket of six other currencies, was trading at 105.262 at 3:20 a.m. Eastern Time (07:20 GMT), virtually unchanged from Friday's six-month high.
The dollar's strength after the Fed's hawkish meeting has held.
The U.S. dollar gained ground last week as the Federal Reserve surprised investors by forecasting higher interest rates for a longer period of time.
The Bank of Japan continued its extraordinarily accommodative monetary policy, in sharp contrast to its counterparts in Britain and Switzerland, which halted their rate-hiking cycles.
This followed the ECB's comparatively dovish tone the previous week.
The Euro fell against the Dollar to 1.0615 on Friday, its lowest level in six months, and the pair was headed for its biggest monthly loss since May, at around 1.8%.
The British pound is on track for its worst monthly performance in a year, falling by more than 3 percent in September, while the GBP/USD exchange rate rebounded by 0.1% to 1.2244.
The US dollar to Japanese yen exchange rate was relatively stable at 148.38, just off the 10-month high hit last week after a dovish meeting by the Bank of Japan.
Analysts at ING said that the outcome was unsatisfactory because neither the announcement nor Governor Ueda's comments indicated a change in policy attitude.
Nearing the psychological level of 150, where traders expect to see action from the Japanese government in the foreign exchange market.
Speakers from the central bank, upcoming inflation statistics
Later in the session, European Central Bank President Christine Lagarde will be the first of several central bank officials to speak this week. She will be followed by Minneapolis Federal Reserve President Neel Kashkari.
This week will wrap up with the release of preliminary consumer pricing data for the bloc in September, and Friday will bring with it vital U.S. inflation statistics.
The German Ifo business sentiment report, which will reveal the state of the eurozone's most important economy, is scheduled for later on Monday.
Property problems in China contribute to the yuan's decline.
The U.S. dollar strengthened against the Chinese yuan by 0.2% to 7.3092 on increased worries over China's debt-ridden property market.
China Evergrande (HK:3333) Group, a major player in the real estate industry, issued a cautionary note saying it would be unable to issue additional debt while a government investigation into its subsidiary Hengda Real Estate Group continued.
Concerns about a wider debt freeze in a market already suffering from a severe cash crisis over the previous three years were exacerbated by this news.
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