The Euro was trading mostly below parity with the US Dollar at the start of the new week, with the common currency pressured by poor economic outlook as energy woes persist.
Meanwhile, the greenback stood just below September 7th more than two-decade peak of 110.79 against peers ahead of the highly anticipated FOMC policy decision.
Markets have now priced in at least a 75 basis point interest rate hike at the Fed’s meeting this week, with a 19% chance of a larger, 1.00% rate increase.
“The dollar can remain elevated as the (Fed) continues to hike aggressively and on growing global recession risks,” Commonwealth Bank of Australia strategists wrote in an investor note.
The Dollar Index may reach a new cyclical peak above 110.8, they noted.
As of 8:05 GMT on Monday EUR/USD was edging down 0.38% to trade at 0.9974. Last week, the major Forex pair climbed as high as 1.0198, which has been its strongest level since August 17th (1.0203).
Meanwhile, EUR/JPY was inching up 0.09% on the day to trade at 143.190 ahead of Bank of Japan’s policy decision on Thursday, with the central bank largely expected to continue with its huge monetary stimulus.
BoJ recently dropped the word “temporary” for its description of CPI increases, even though inflation rate in Japan remains much lower than in other parts of the globe.
Daily Pivot Levels (traditional method of calculation)
Central Pivot – 0.9998
R1 – 1.0051
R2 – 1.0089
R3 – 1.0142
R4 – 1.0195
S1 – 0.9959
S2 – 0.9906
S3 – 0.9868
S4 – 0.9828