JAKARTA (TheInsiderStories) – Ahead of the meeting of the three central banks, the U.S dollar strengthened and sterling fluctuated against other global currencies. The world’s top central banks the Federal Reserves (Fed), European Central Bank (ECB) and Bank of Japan (BoJ) meet this week.
The dollar rallied against major currencies on yesterday ahead of the Federal Reserve’s policy decision Wednesday (13/06). British pound sterling moved fluctuate after Prime Minister Theresa May beat the resistance in parliament over Brexit plan while the euro is still weakening in front of the greenback..
Pound Sterling strengthened against the U.S dollar due to improved manufacturing index. The pound moved up and down after Premier May saw parliamentary opposition to a bill amendment for the country’s exit from the European Union next year that threatened to undermine its authority.
The pound rose 0.3 percent against the dollar to $1.3424 after parliament voted in favor of the government on several amendments to the European Union drawdown bill. Finally the pound settled around $1.3373.
Last week, Japanese yen weakened against the American dollar followed the country’s economic data is green. Earlier on Tuesday, data showed U.S consumer prices rose in May. In general the U.S dollar and Japanese Yen is still potential to continue the correction on the next trade.
The ECB meets on June 14, which could show signs of intentions to start unwinding a massive bond-buying program. The BoJ will meet June 14-15, but will not deliver the results immediately after the meeting.
At the meantime, the rupiah weakened to Rp13,966 per U.S dollar or dropped 0.24 percent from last weekend’s position of Rp 13,932 on Tuesday. The news that Fed’s Chairman Jerome Powell is considering the possibility of holding a press conference and answering questions after each Fed meeting also supports the dollar.
The rupiah weakened in the face of the dollar on Tuesday. External sentiment is affecting the weakening of the rupiah today. Earlier the U.S dollar trade received support from the historic meeting of U.S’s President Donald Trump with North Korean leader Kim Jong Un in Singapore.
Last month, the Fed hold the rate steady and stayed on track for June increases amid the concerned on inflation. The Federal Open Market Committee (FOMC) held the funds rate at a target of 1.5 percent to 1.75 percent.
On the monetary side, on May 2, the FOMC hold the rate steady and stayed on track for June increases amid the concerned on inflation. Powell has said, the committee will carefully monitor actual and expected inflation developments and expects that economic conditions will evolve in a manner that will warrant further gradual increases in the Fed funds rate.
While, the ECB left its key interest rate unchanged in the last governors meeting. The interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00 percent, 0.25 percent and -0.40 percent respectively.
The same move has take by BoJ, keep the interest rate steady. The overnight interest rate of minus 0.1 percent to the Policy-Rate Balances in current accounts held by financial institutions at the Bank, said the central bank in press statement.