The dollar gave back some of last week’s gains as investors risk aversion eased after global stock market rebounded today. The euro tested the 1.37 handle against the dollar, while the sterling remained above the 2.02 support level.
After the huge decline in last week, the Standard & Poor’s 500 index today surged 1.15% to 1475.70. The Dow Jones industrial average roses more than 100 points. The rebound in equities reduced risk aversion towards risky investments. As a result, the safe haven currency, the US dollar, lost its lust and fell slightly.
This week’s calendar is heavy with two central bank policy decision announcements on Thursday and US payroll report due Friday. The European Central Bank and Bank of England are widely expected to maintain interest rates unchanged at 4.00% and 5.75% respectively. We will focus on the central bank post-meeting statements for clues on future interest rate hike schedule. Both of the two banks are anticipated to raise rates at least one more time in the second half of the year.
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