CRYPTO NEWS: THE US DOLLAR RISES AS MARKETS PREPARE FOR A SIGNIFICANT FED RATE HIKE.

US DOLLAR RISES
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THE US DOLLAR RISES AS MARKETS PREPARE FOR A SIGNIFICANT FED RATE HIKE. ON MONDAY, THE DOLLAR STRENGTHENED AGAINST A BASKET OF MAJOR CURRENCIES AS IT TRADED IN TIGHT RANGES AHEAD OF A WEEK FULL OF MEETINGS BY CENTRAL BANKS, INCLUDING THE FEDERAL RESERVE, WHICH IS EXPECTED TO ANNOUNCE ANOTHER SIZABLE INTEREST RATE HIKE.

OVERVIEW OF THE US DOLLAR RISES AS MARKETS PREPARE FOR A SIGNIFICANT FED RATE HIKE:

SINCE MARKETS IN LONDON AND TOKYO WERE CLOSED FOR PUBLIC HOLIDAYS, TRADE WAS GENERALLY SLOW.

US DOLLAR RISES
THE US DOLLAR RISES AS MARKETS PREPARE FOR A SIGNIFICANT FED RATE HIKE

GIVEN EXPECTATIONS THAT THE FED WOULD MAINTAIN ITS AGGRESSIVE TIGHTENING PATH TO CONTAIN UNCOMFORTABLY HIGH INFLATION, GLOBAL STOCK MARKETS REMAINED ON EDGE AND THE DOLLAR MAINTAINED ITS FIRM TONE.

ACCORDING TO JOHN DOYLE, VICE PRESIDENT OF TRADING AND DEALING AT MONEX USA IN WASHINGTON, “ON A BROAD SCALE, THE ONGOING SELL-OFF IN INTERNATIONAL SHARES IS HELPING THE DOLLAR.”

HE ALSO ADDED THAT “I BELIEVE THAT THE DOLLAR WILL CONTINUE TO FOLLOW GENERAL RISK SENTIMENT AS LONG AS THE FED’S DECISION IS NOT FINAL. ALTHOUGH WE DO NOT BELIEVE THE FED WILL INCREASE INTEREST RATES BY 100 BASIS POINTS THIS WEEK, THE POSSIBILITY STILL EXISTS.”

ACCORDING TO REFINITIV DATA, FED FUNDS FUTURES HAVE A 79% CHANCE OF RAISING RATES BY 75 BASIS POINTS THIS WEEK AND A 21% CHANCE OF RAISING RATES BY 100 BASIS POINTS AT THE END OF THE US CENTRAL BANK’S TWO-DAY POLICY MEETING.

A 20-YEAR HIGH OF 110.79 WAS REACHED ON SEPTEMBER 7; THE DOLLAR INDEX, WHICH COMPARES THE VALUE OF THE DOLLAR TO SIX OTHER CURRENCIES, WAS UP 0.4% AT 109.98.

IN ADDITION, THERE ARE NUMEROUS HOLIDAYS THIS WEEK THAT COULD REDUCE LIQUIDITY AND CAUSE SHARPER PRICE MOVEMENTS, INCLUDING THOSE IN AUSTRALIA ON THURSDAY, JAPAN AGAIN ON FRIDAY, AND BRITAIN, JAPAN, AND BRITAIN ON MONDAY.

WITH RESPECT TO OTHER CURRENCIES, THE NEW ZEALAND AND AUSTRALIAN DOLLARS BOTH EXPERIENCED DECLINES OF 0.8% AND 0.5%, RESPECTIVELY, WHILE THE EURO WAS DOWN 0.3% AGAINST THE DOLLAR AT $0.9984 AND STERLING WAS DOWN 0.4% AT $1.1386 AND APPROACHING FRIDAY’S 37-YEAR LOWS.

AS OF LAST WEEK, THE NEW ZEALAND DOLLAR WAS TRADING AT US$0.5937, DOWN FROM ITS PREVIOUS LOW OF US$0.5933 SET IN MAY 2020.

AT C$1.3324 TO THE US DOLLAR, THE CANADIAN DOLLAR DROPPED TO ITS LOWEST LEVEL IN ALMOST TWO YEARS.

ACCORDING TO DOYLE OF MONEX, “OIL’S DECLINE HAS MADE IT POSSIBLE FOR OTHER COMMODITY-BASED CURRENCIES, INCLUDING THE CANADIAN DOLLAR, TO MAKE A MODEST RECOVERY.”

THE DOLLAR WAS ABOUT 0.4% HIGHER TO 143.50 YEN, JUST BELOW A SIGNIFICANT MARK AT 145, WHICH HAS BEEN STRENGTHENED BY JAPANESE OFFICIALS’ TOUGHER DISCUSSION ABOUT MONETARY INTERVENTION.

AT ITS MEETING ON WEDNESDAY AND THURSDAY, THE BANK OF JAPAN IS WIDELY ANTICIPATED TO MAINTAIN ITS ULTRA-LOOSE MONETARY POLICY BY MAINTAINING THE CURRENT LEVEL OF MASSIVE STIMULUS. HOWEVER, A SHIFT IN JAPANESE MONETARY POLICY MAY OCCUR SOONER THAN ANTICIPATED GIVEN THAT THE COUNTRY’S CENTRAL BANK RECENTLY STOPPED USING THE WORD “TEMPORARY” TO DESCRIBE HIGH INFLATION.

ON MONDAY, THE CHINESE YUAN TRADED BELOW THE PSYCHOLOGICALLY IMPORTANT 7-PER-DOLLAR LEVEL AND ENDED THE DAY AT A NEW 26-MONTH LOW. THE CHINESE YUAN WAS 0.35 WEAKER IN OFFSHORE TRADE.

THE MOST VALUABLE CRYPTOCURRENCY BY MARKET VALUE, BITCOIN, DROPPED TO A THREE-MONTH LOW BELOW $19,000 AS CONCERN OVER RISING INTEREST RATES AROUND THE WORLD DRAGGED DOWN RISK ASSETS. AT $19,241, IT WAS LAST DOWN 0.9%.

THE ETHEREUM BLOCKCHAIN’S NATIVE CRYPTOCURRENCY, ETHER, RECOVERED FROM A TWO-MONTH LOW AGAINST THE DOLLAR TO CLOSE THE DAY UP 1.8% AT $1,358.

LAST WEEK, ETHEREUM UNDERWENT A SIGNIFICANT SOFTWARE UPGRADE THAT CHANGES THE WAY ETHER TOKENS ARE CREATED AND SIGNIFICANTLY LOWERS ITS ENERGY CONSUMPTION.

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CRYPTO NEWS: THE US DOLLAR RISES AS MARKETS PREPARE FOR A SIGNIFICANT FED RATE HIKE.

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