Around 11:25 a.m., the American currency stagnated (-0.02%) against the euro, at 1.1507 dollars, and against the pound, against which it fell by barely 0.05%, to 1.3328 dollars.
The US dollar is treading water on Tuesday, the first day of the Federal Reserve (Fed) meeting, while the Australian currency benefits from the fact that the Australian central bank is one of the first major central banks to have raised its rates to deal with soaring energy prices.
Around 11:25 a.m., the American currency stagnated (-0.02%) against the euro, at $1.1507, and against the pound, against which it fell by barely 0.05%, to $1.3328.
“Apart from the information relating to war and oil”, “a certain caution could prevail before (the announcement) of the Monetary Policy Committee” on Wednesday, judges Francesco Pesole, analyst at ING.
Investors are counting on the fact that the American central bank will keep its interest rates unchanged, in a range of 3.5% to 3.75%, after two days of debates.
On Monday, however, “the drop in oil prices”, justified “by cautious optimism regarding the fluidity of traffic in the Strait of Hormuz“, had “resulted in a significant downward correction of the dollar against all currencies”, reports Mr. Pesole.
The greenback had lost all of its Friday gains that day, but remains up around 2.2% since the start of the conflict at the end of February.
But since then, the energy market has become tense again, strained by persistent concerns about the supply of crude from the Middle East, disrupted by new attacks.
The oil industrial zone of Fujairah, in the United Arab Emirates, was targeted by a new drone attack on Tuesday and a tanker was hit by an “unknown projectile” while at anchor in the Gulf of Oman.
For its part, the Reserve Bank of Australia (RBA) on Tuesday raised its key rate by a quarter of a basis point, to 4.10%, citing the “sharp rise in fuel prices” caused by the war in the Middle East, which risks fueling inflationary tensions.
This decision was taken by 5 votes to 4, but “despite this close vote”, investors “anticipate a further rate hike by the RBA at the next monetary policy meeting in May”, according to Lee Hardman, analyst for MUFG.
After moving up and down, Australia’s currency rose 0.17% to 1.4116 Australian dollars per US dollar.
