Urgent: The dollar suddenly bullied before the Fed’s speech… Gold, the ruble and the lira fell By Investing.com


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Investing.com – The currency lord is back on top of the scene as investors await a release that may provide a clearer view of monetary policy.

Once again, the currency master returned to the highest levels of the 102, after falling below it yesterday, Tuesday, to reach the levels of 102.45 points, an increase of about 0.6%.

The return of the dollar comes after a wave of declines that affected the US currency, following insane rises that made the main index of the dollar to its highest level in more than 20 years.

And while the US 10-year bond yields rose, they still recorded a decline, as they fell during these moments in the range of 0.02 down to 2.74%.

ruble

It fell sharply against the US dollar during Wednesday’s trading, after record highs, during which it reached the highest level in 7 years, with anticipation.

The Russian Central Bank said that it will hold an extraordinary meeting on Thursday, to consider the current interest rate levels, amid expectations about the possibility of a trend to reduce interest rates from the current level of 14% to levels of 12.5%.

The ruble fell against the dollar after the Russian Ministry of Finance announced that Moscow would start paying dues on foreign debts in the local currency, not the dollar or the euro, hours after canceling the permission granted by the US Treasury to Russia to pay the dues in dollars.

lira

It also fell by more than 1.8%, down to levels near 16.4 pounds / dollar, while investors are awaiting a crucial meeting.

The Turkish lira is trading near its lowest level since the great collapse in December 2021, when it fell at 18 levels after the central bank’s interest-cutting decision.

It fell on Wednesday, with the dollar’s rise amid anticipation of the release of the minutes of the Federal Reserve’s latest meeting later today, which may provide some clarifications regarding monetary tightening.

The spot price for the yellow metal fell by 1% at $ 1845, losing nearly $ 20 in one go.

This comes after gold rose yesterday, Tuesday, to $ 1869.49 an ounce, which is the highest in more than two weeks, specifically from May 9.

Important data

The data released today showed that US durable goods orders rose less than expected during April, rising by 0.4% after the March data was revised down to show an increase of 0.6%.

The US Federal Reserve raised interest rates at the current May 4th meeting by half a percentage point, and Fed Chairman Jerome Powell said: “Inflation is very high and we understand the difficulties it causes, and we are moving quickly to reduce it.”

Bank of America (NYSE:)

The CEO of Bank of America said that the US economy can avoid a recession in light of the continued high rates of US consumer spending.

Brian Moynihan added that American consumers are in a good position and are not burdened with debt, as they continue to spend at high rates, at least in the short term.

Moynihan said clients of the second largest US bank by assets still have more checking accounts and savings than they did before the pandemic.

The CEO of Bank of America added that their spending rate during this May is about 10% higher compared to the same period last year.

Moynihan emphasized that the Fed will be able to manage the situation and face the difficult challenge of stopping the acceleration of inflation without slowing the economy significantly.

Federal Intersections

Atlanta Fed President Rafael Bostik called on members of the US Federal Reserve not to rush into approving interest rate hikes this year.

Bostik said uncertainty surrounds the economic outlook, particularly regarding the war in Ukraine, the coronavirus pandemic and supply chain disruptions.

The Fed member added that monetary policy makers should be aware of these turmoil, and proceed with extreme caution in terms of adjusting monetary policy.

Bostick said shifts in financial markets can occur at a rapid pace that dramatically changes expectations and added that it is essential the Federal Reserve is prepared for and closely following these developments.

While Esther George, Governor of the US Federal Reserve in Kansas City, expected that financial markets are highly unstable, and also expected that the Federal Reserve would raise interest rates to 2% by next August.

sharp lift

US investor Bill Ackman said that strong inflation could slow if the Federal Reserve takes more aggressive measures or turns the current sell-off in the stock market into a complete meltdown.

Hedge fund manager Pershing Square said the correction in the US stock market was due to investors’ lack of confidence in the central bank’s ability to stem the acceleration of inflation, which reached its highest level in 40 years.

Ackman believes that the stock market turmoil will not end unless the Federal Reserve controls the rise in prices.

Ackman said if the Fed does not do its job, the market will do the job of the bank, and that is what is happening now, the only way to stop rising inflation is to tighten monetary policy sharply or with the collapse of the economy.

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