May 28, 2023

Dubai Week

Complete Dubai News World

Risks of an economic slowdown will pressure the central bank to change its policies

Haider: Central banks will not continue monetary tightening

Published in:
Last Updated:

Sam Hyder, market strategy consultant at One Royal, said the US dollar has been on a sustained decline over the past two weeks and the market is re-pricing the direction of the US Federal Reserve and interest rates.

In an interview with Al-Arabia, he said that the reasons for selling the dollar are increasing expectations or prospects of a US economic recession. Economic recession.

He pointed out the need to look at the “ASM” industrial index and the service sector because it is the most reflective of the US economy, and if this index starts to decline, the Fed will change its monetary policies and increase the decline. dollar.

Haider ruled out further monetary tightening and interest rate hikes by central banks as markets expect an easing of monetary policy tightening after the recent turmoil.

He expected the central bank of New Zealand to turn around and cut interest rates when market downturns appeared, particularly after the collapse of dairy prices, a key component of the New Zealand economy.

New Zealand’s central bank suddenly raised interest rates by 50 basis points amid efforts to control inflation as the economy drifted into recession.

The New Zealand central bank raised interest rates from 4.75% to 5.25%, while expectations were for a 0.25% increase, and the local currency rose after the close.