The U.S. dollar firms ahead of central bank meetings

The U.S. dollar started the week firmly on Monday. Notably, investors are cautious ahead of several central bank meetings headlined by the Fed. Moreover, the looming catastrophe at China Evergrande added to markets’ fragility.

The euro nursed losses from its weakest week in a month, declining slightly to reach a four-week low of $1.1721.

The British pound and risk-sensitive Australian and New Zealand dollars were also pressured toward new troughs. The New Zealand dollar stood at $0.7024. Meanwhile, the sterling touched $1.3722, hitting a three-week low. The Australian dollar declined by 0.1% to settle at $0.7253.

According to Westpac analyst Imre Speizer, the greenback is having a bit of a recovery and says that everyone is now focused on Fed, waiting for a tapering signal.

The U.S. dollar index increased very slightly to a month-high 93.263. Besides, the safe-haven Japanese yen held at 110.01 against the dollar.

The Federal Reserve concludes a two-day meeting on September 22. Investors anticipate that it will stick with broad plans to start tapering this year. However, they expect the Federal Reserve to hold off providing details or a timeline for at least a month.

Furthermore, among the other major central banks, the Bank of England (BoE) is anticipated to leave policy settings unchanged. However, traders see the potential for increases in the pound if the BoE adopts a hawkish tone or more members call for asset purchase tapering.

There is no anticipation of policy shifts at the resolutely dovish Bank of Japan on Wednesday. Still, on Thursday, Norway’s Norges Bank is likely to become the first G10 central bank to lift rates.

Moreover, the Norwegian crown had declined with oil prices and the growing greenback on Friday. The currency last sat at a more than one-week low of 8.7154 per dollar.

Meanwhile, the oil-sensitive Canadian dollar was also on the back foot ahead of an election on Monday.

In China, onshore stock and currency markets were closed on September 20. The Chinese yuan dropped around 0.1%, and through its 200-day moving average to 6.4770 per dollar.

In cryptocurrencies, Bitcoin traded close to $43,000. The dominant cryptocurrency’s price has recently witnessed extreme volatility. However, a Bloomberg analyst, Mike McGlone, announced that he is optimistic about the coin’s future. According to McGlone says that Bitcoin might surpass $100,000 this year. Meanwhile, the second-largest cryptocurrency, Ethereum, traded close to $3,000.

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