Investors will closely monitor the favorite signs of a possible decrease in the interest rate, if inflation approaches the target indicator of 2% annually for the American central bank. For the Fed, the priorities will be the initial steps of Trump in the field of general policies, which are likely to affect the economy this year.
The Federal Reserve has already noted the possible consequences of trade, immigration, and other policies of Trump; the analytics at the December meeting put forth proposals on the insignificant slowdown of growth, an increase in unemployment, and the absence of significant progress in the fight against inflation in the coming year.
"This clearly puts under observation the productivity of the technological sector of the USA and the appetite for risk, as well as makes under the microscope the upcoming reports on profits from Microsoft, Tesla, Meta Platforms, and Apple," added Simpson.
The dollar denominated bond yielded after falling to the lowest level at 4.561% relative to the obligations of the USA with a duration of 10 years on Monday, as investors sought risk-free assets.
The euro traded at a rate of $1.0428, down 0.6% before the European Central Bank meeting this week, where a decrease in interest rates is expected after the statement of the US President regarding the possibility of tariffs introduction.
"The fact that the artificial intelligence DeepSeek triggered greater volatility for USD/JPY on Monday, than the Bank of Japan's gathering last week, shows how important this is for traders," said Matt Simpson, senior market analyst at City Index.
The strengthening dollar against the backdrop of falling Japanese yen to the level of 153.715 on Monday against the backdrop of demand for risk-free assets once again pushed the currency pair to the level of 155.70.
"Tariffs will remain at the center of attention at this moment, especially as the deadline for the introduction of the first round of tariffs approaches on February 1," noted Kieran Williams, head of the Asia FX department at InTouch Capital Markets.
The dollar index, which reflects the rate of the American currency against six competitors (yen and euro), rose by 0.13% to 107.94 after falling to the level of 107.68 on Monday.
The two-day meeting of the Federal Reserve begins on Tuesday, where a maintenance of the current interest rates is expected. A significant drop in technology stocks occurred on the market, and the leader in artificial intelligence Nvidia lost 17%, reducing its market capitalization to $593 billion - this is the largest daily loss for any firm on Wall Street.
