oreign exchange

The US dollar started the week unfavorably, with indicators measuring its performance against a basket of other major currencies indicating that last week's decline continued. Despite recent public expressions of concerns about inflation stickiness and the need for further interest rate hikes by senior Federal Reserve officials, the US dollar still closed down last week. The US dollar strengthened again at the beginning of the year, and investors digested the Fed's further tough stance, but the recovery is about to stop. The foreign exchange market seems to have not accepted the idea of a new wave of tough stance from the Federal Reserve. Jerome Powell's appearance in the Senate and Congress later this week may strengthen this view and create space for further decline in the US dollar. Should the Federal Reserve chairman show a tone that is not as tough as some of his peers have recently done.

Ricardo Evangelista - Senior Analyst, ActivTrades

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