Dollar Rose Ahead of Several Central Bank Meetings 

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Wibest – ECB: European union flag in front of the ECB headquarters.

The U.S. dollar rose on Tuesday, though it remained near recent lows due to last week’s worse than expected jobs report. Meanwhile, attention turns to several central bank meetings during the week. 

The dollar index which tracks the U.S. currency against a basket of six currencies rose 0.2% to 92.215 at 2:55 AM ET. 

The USD/JPY gained 0.1% to 109.92 and the EUR/USD dropped 0.1% to 1.1865, just off last week’s high of 1.1909. The GBP/USD declined 0.1% to 1.3824 after British house price growth fell to 7.1% in August from 7.6% in July. But prices rose a surprisingly strong 0.7% on the month.

On Monday, it was a holiday in the U.S., and that factor affected the foreign exchange markets after the latest U.S. jobs report disappointed. The latest jobs report indicates that the Federal Reserve is likely to delay any dialing down of monetary stimulus.

Dollar and important factors 

But with the U.S. jobs report now out of the way, the focus is now on policy decisions around the world. 

The AUD/USD fell 0.3% to 0.7416 declining from the recent high of 0.7477. The Australian dollar fell after the Reserve Bank of Australia pushed ahead with a cautious reduction of its bond-buying program. Nonetheless, the central bank once more extended the length of time it will exist. On Tuesday, the Reserve Bank of Australia said that it will purchase government bonds at a pace of A$4 billion ($3 billion) a week. But the central bank will do this until at least mid-February. It was originally planning to review the program in mid-November.

On Wednesday, the Bank of Canada will make its policy decisions. The Canadian dollar is close to its highest level in about three weeks. 

On the following day, the European Central Bank (ECB) will make its policy decision. Its meeting will probably be the week’s highlight. Hawkish policymakers of the ECB are willing to reduce the central bank’s monetary stimulus. The central bank increased its pace of bond-buying earlier in the year. 

Russia’s central bank meeting is another important news. The country’s central bank meets just a couple of weeks after annual inflation hit a five-year high. At its July meeting, the central bank increased its benchmark policy rate by 100 bps to 6.5%. Bank of Russia is expected to raise its benchmark policy rate once again. 

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