Dollar weakening increased Moldova's state debt by almost $60 mln
The dollar strengthened in March thanks to inflows into safe haven assets as the war raged, but lost much of those gains amid hopes of a peace deal this month. It has stabilized in recent days after talks between the U.S. and Iran stalled.
On Monday, the dollar index, which measures the U.S. currency against six major currencies, stood at 98.32, down 0.3 percent from the previous day.
It is widely believed that the Federal Reserve will keep interest rates unchanged this week.
“The Federal Reserve may be inclined to warn against keeping interest rates unchanged for a longer period,” said Chris Turner, head of FX research at ING, arguing that this could have a moderately positive impact on the dollar.
Euro watch: energy prices
Since the announcement of the ceasefire in early April, the euro has strengthened from $1.15 to around $1.18. The US is less adversely affected by a surge in oil prices than the eurozone and Japan, which are heavily dependent on oil imports.
While markets believe the central bank is inclined to take a tougher stance on the energy crisis, they expect policymakers to leave interest rates unchanged at this week’s meeting.
The single European currency was up 0.15 percent at $1.1741 on Monday. The Japanese yen rose 0.1% to 159.17 per U.S. dollar, slightly short of the crucial 160 level that traders fear could trigger intervention by Tokyo in currency markets.
The ley shows no signs of concern
The Moldovan leu started the week with a slight strengthening against the US dollar. Against the euro, the currency showed a slight weakening (by 0.1 bani).
In general, the leu exchange rate remains relatively stable, fluctuating in a narrow range against the background of market changes. The dollar exchange rate is expected to fluctuate in a narrow range of 17.30-17.40 MDL until the end of the week. By the end of the quarter, the exchange rate is expected to be around 17.04 MDL per dollar.
The euro will remain around MDL 20.28. No significant jumps are forecasted, as the market has already played off the latest news from the EU.
