Home Business News Forex traders increasingly focus on monetary policy expectations

Forex traders increasingly focus on monetary policy expectations

23rd Jan 24 12:09 pm

The US dollar was marginally weaker today amid ongoing uncertainty. The currency could find limited support from today’s economic data releases as traders await tomorrow’s PMI data.

Traders continue to monitor new data in order to determine the next steps in the Federal Reserve’s monetary policy as its next meeting approaches. As a result, the dollar could see increased volatility as new data appears.

The euro continued to see a limited performance and could continue to trade horizontally as traders brace for the European Central Bank’s meeting on Thursday. However, the currency could react to the release of PMI data tomorrow in the meantime.

The British Pound continues to slightly improve although it has remained within its range for the last few weeks, as markets evaluate the Bank of England’s (BOE) difficult position amid a slowing growth rate and persistent inflation. Tomorrow’s PMI data could affect the currency’s direction to a certain extent.

The Yen was leading today’s market performance, gaining against the dollar, after the Bank of Japan (BOJ) maintained its monetary policy unchanged, as expected. Markets continue to price in an exit from the BOJ’s negative interest rate policy which could continue to support the yen.

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