Dollar firms ahead of central bank meetings as steadier stocks stall safe-haven demand
SPY•The dollar rose against the euro, yen and pound as traders awaited policy decisions from the Fed, ECB and BOJ, while calmer equity markets reduced demand for safe havens. The Fed, ECB and BOJ are expected to hold rates, and this week also brings earnings from Alphabet, Microsoft and Amazon.com.
1. Dollar gains ahead of meetings
The dollar edged higher against the euro, yen and pound on Tuesday as investors prepared for central bank decisions from the Federal Reserve on Wednesday, the European Central Bank on Thursday and the Bank of Japan on Friday. All three are expected to keep rates on hold, leaving traders focused on signals about the outlook. The dollar rose 0.16% against the yen to 157.73, while the euro fell 0.17% to $1.1154 and the pound dipped 0.14% to $1.3324.
2. Stocks and currency pressures
Calmer equity markets, after last week’s concerns about AI stocks, helped lift risk appetite and supported the dollar against perceived safe havens such as the yen and Swiss franc. ING currency analyst Francesco Pesole said stabilising AI-related sentiment had allowed markets to reconnect with a supportive backdrop of a hawkish Federal Reserve and high energy prices. This week’s corporate earnings include reports from Alphabet, Microsoft and Amazon.com. The euro was down 1.5% against the dollar for October, pressured by high energy costs and concerns about France’s fiscal position.
