Dollar Rally Triggers Uncertainty Ahead of FOMC Rate Decision
The past week saw a mini dollar rally after the PPT intervened to counter rising inflation and a soaring dollar. The price of oil reached $100 again, and wholesale inflation rose, prompting rate hike campers to buy dollars.
However, the FOMC's decision on interest rates is still uncertain, with some predicting a rate hike tomorrow, while others are more cautious due to its proximity to the general election.
The 10-year Treasury reached 4.97% last week, weighing heavily on gold and silver prices. The metal prices rebounded slightly on Friday but are expected to continue facing pressure from rising yields in bonds.
Meanwhile, the European Central Bank raised interest rates for the second time this year in response to surging energy costs, while the Bank of Japan is set to meet this week to discuss rate hikes. Japan's debt problems and demographics still weigh heavily on its currency, the yen.