Peter Nurse

Investing.com: The U.S. Dollar edged up Monday ahead of remarks from Jerome Powell, the chair of the Federal Reserve, later in the session. This comes just days after the U.S. Central Bank began tightening its monetary policy. 

The, which measures the greenback in relation to a basket made up of six currencies, was slightly higher at 98.263.

Last week, for the first-time since the pandemic, The Bank of England raised its key interest rates by 25 basis point. Given the high inflation, this is likely to signal the beginning of an aggressive tightening cycle. Therefore traders will look for clues as to the pace and magnitude of any future rate increases.

Fed Chair Jerome Powell is set to speak later Monday about the economic outlook at the annual conference of the National Association for Business Economics, ahead of a raft of speeches from other Fed officials during the week, including Powell himself making another appearance on Wednesday.

“There is a camp arguing that the dollar typically sells off in the first six months of a Fed tightening cycle – presumably on the ‘buy-the-rumor, sell-the-fact’ mentality of a well-telegraphed tightening cycle,” said analysts at ING, in a note. “What is different this time, in our opinion, is the aggressive front-loaded tightening about to be undertaken by the Fed and events in Ukraine which have damaged European growth prospects and will weigh on currencies in the region.”

Falling 0.1% at 1.1051, 0.2% at 1.3160. The impact of expectations for weaker European economic development as the Ukraine conflict rages, raising energy costs, impacted both currencies.

However, short-term speeches made this week at the by policymakers including President Christine Lagarde could impact the direction of euro in particular.

The index climbed to 119.22. This is not too far from Friday’s six-year high of 119.39. As the gap between U.S. interest rates and Japanese has widened, the yen is under pressure. It fell 1.6% last week.

The Fed hiked its interest rate on Wednesday, while the Fed kept its dovish policy in place.

Following the rally that was triggered by higher commodity prices and a recent drop of 0.3%, it fell 0.1% to 0.7392.

The stock index rose 0.3% to 95.0994. Fighting continues in Ukraine, especially around Mariupol (south-eastern Ukraine), with Ukraine refusing the Russian request that it withdraw its troops and surrender.