(London) The US dollar fell on Monday against a basket of other major currencies, including the euro, ahead of the US Federal Reserve meeting.
At around 11:30 a.m., the dollar index, which compares the US currency to a basket of other major currencies, was down 0.38% to 92.91 points, reversing most of its rise during the month.
Against the euro, the dollar fell 0.33% to $1.1810 per euro.
The Canadian dollar is trading at 79.71 US cents, while the US dollar is buying 1.2538 Canadian dollars.
The outcome of the Fed’s two-day meeting will be announced on Wednesday.
“The Monetary Committee’s meetings are more important as policy approaches change,” said Fouad Razakzadeh, analyst at ThinkMarkets.
Inflation, as well as the risks posed by variables to economic recovery, will be on the meeting list.
If the Fed opens the door to tightening its monetary policy to counter inflation, it will make the dollar more attractive.
Conversely, the message of concern about growth, an indication that ultra-low interest rates and the asset repurchase plan are here to stay, will be negative for the dollar.
“A major policy change is unlikely a month before the Jackson Hole meeting,” where the Fed will meet with other major central bankers, said Chris Beauchamp, analyst at IG.
But the dollar could move if analysts stick to a slight change in language, he continues.
The British pound rose on Monday against the dollar (+0.54% to $1.3823) but also against the euro (+0.21% to 85.44 pence per euro), while the number of coronavirus cases fell in recent days in the UK.
In the grip of an explosion in cases since the start of the summer attributed to a highly contagious delta variant, the UK recently recorded up to 60,000 new cases per day, but appears to have seen a decline in recent days.
OFX analysts note that “the pound’s gains may be limited by discussions between London and Brussels over the Irish protocol.”
Finally, on the crypto side, bitcoin jumped 11.3% to $38,385, benefiting from Tesla’s more positive tone on cryptocurrency and speculation about Amazon’s interest.
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