Foreign Exchange Market Awaits Federal Open Market Committee Meeting Next Week
On Wednesday, investors in Asia appeared to be anxiously waiting for next weeks’ meeting of the FOMC, and as a result there was little change in the U.S. Dollar in afternoon trading. On April 30, 2008, the federal policy makers will meet to discuss interest rates. Analysts are already predicting that during this meeting the Federal Reserve will cut interest rates by at least 25 basis points.
The Euro rose to $1.6020 in overnight trading, due to the fact that officials of the European Central Bank intend to either keep interest rates steady at 4% or raise them in order to curb inflation in the Euro zone. However, some analysts believe that now that the Euro has hit the $1.60 mark, officials at the ECB may be inclined to intervene in the market. Interest rates have been steady at 4% since June of this year, while the Fed has reduced its rate by 300 basis points since September of last year.
March inflation rate in the Euro zone reached 3.6% which is more than the 2% target set by the European Central Bank for the year, and also the highest level since mid-1992.
On April 23, 2008, at 01:00 (05:00 GMT) the U.S. Dollar traded at 103.3 Yen, compared to 103.01 Yen while the Euro traded at $1.5989 compared to $1.5976 in early trading in Sydney.