Dollar drifts higher; BOE continues raft of central bank meetings this week By Investing.com

Investing.com – The U.S. dollar rallied in thin holiday trade Monday, as traders digested the impact of last week’s central bank decisions, with Federal Reserve Chairman Jerome Powell’s speech looming on the horizon.

At 02:00 ET (06:00 GMT), the dollar, which measures the greenback against a basket of six other currencies, was trading 0.1% higher at 101.935, just above its one-month low, although Activity is likely to be limited with US markets closed on Monday for the June holiday.

Powell to testify before Congress

The US Federal Reserve led the parade of top central bankers meeting last week to discuss monetary policy and, as expected, paused a year-long cycle of rate hikes to assess its impact on inflation and the country’s economic outlook.

This also hinted at the potential for further price increases in the future, with consumer prices still weaker than their 2% target, but indicated the importance of upcoming economic data supporting these moves.

With this in mind, data for the US as well as for the US will be carefully studied this week, as well as Powell’s data two days before both houses of Congress.

Aside from Powell, several Fed officials are also scheduled to speak this week.

The euro neared a one-month high, and the yen weakened

Elsewhere, it fell 0.1% to 1.0935, near a one-month peak, while it fell 0.2% to 141.52, with the yen bouncing off a seven-month low against the dollar, after falling 1% on Friday.

It raised interest rates by 25 basis points on Thursday and left the door open for further hikes, while the week was concluded with the major central bank staying away, maintaining its ultra-easy monetary policy.

Next Bank of England

It rose to 1.2824, with data released on Wednesday likely to be the main driver of sentiment ahead of Thursday’s meeting.

The Bank of England is widely expected to raise its key rate to 4.75% from 4.5% on Thursday, and the May CPI figure is expected to confirm that UK inflation remains more than four times above the central bank’s medium-term target of 2%.

“We still think the rate of inflation will come down, but it’s taking much longer than expected,” Bank of England Governor Andrew Bailey said last week, after data showed that core wages in the three months to April were 7.2% higher. from a year ago.

Elsewhere, it fell 0.2% to 0.6866, while rising 0.3% to 7.1468, with the yuan slipping as markets priced in a possible cut in the loan prime rate on Tuesday.

The People’s Bank of China cut interest rates twice last week and is now widely expected to cut interest rates as it tries to boost its ailing economy.