Dollar is on a downward trend for the second consecutive month

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The value of the dollar has gone down recently, and traders are waiting for important meetings by central banks in May to see when they will stop increasing interest rates. The most important meeting will be the FOMC meeting next week, where the Federal Reserve is expected to increase rates by 0.25%. However, traders will focus on the guidance for future rate changes. Although some parts of the economy are doing well, recent data shows that the US economy is slowing down and inflation is still high. Traders are trying to decide how much interest rates will be cut in the coming months.

In early Asia trade, the US dollar decreased in value against most major currencies. The euro and sterling increased in value by 0.05% to $1.0994 and 0.02% to $1.2447, respectively. The Aussie dollar also increased slightly by 0.03% to $0.6696. On Friday, new data was released showing that business activity in the US and Eurozone had increased in April. This contradicts concerns that there might be a recession in major economies. Ray Attrill, who is the head of FX strategy at National Australia Bank, said that the services sector in both Europe and the US seem to be doing well, and there are concerns about inflation.

Traders are expecting the European Central Bank (ECB) to increase interest rates by 0.25% or possibly 0.50% when it meets next week. The ECB’s President, Christine Lagarde, said that inflation in the euro zone is still too high and that the ECB needs to do more to achieve its goal of 2% inflation. The New Zealand dollar increased by 0.07% to $0.6143 while the U.S. dollar index decreased by 0.02% to 101.66. The U.S. dollar index is expected to have a monthly loss of almost 0.9%, after falling over 2% in March.

The Bank of Japan’s policy meeting this week is the main focus in Asia. This is the first meeting to be chaired by new Governor Kazuo Ueda. It is expected that Ueda will maintain the Bank of Japan’s current easy policy at the meeting. Ueda has said that he will not make any changes to the policy quickly. Christopher Wong, who is a currency strategist at OCBC, said that he expects the Bank of Japan to remove the YCC regime and increase interest rates later this year. However, he thinks that a policy assessment is likely to be done before making any decisions. The yen is currently 0.1% higher at 133.98 per U.S. dollar.