Experts say that the US dollar is going to gain strong momentum this trading week. Counting the days before the Fed’s policy meeting, traders take less notice of other assets. In the Asian session, the US dollar kept on a steady rally against the Japanese yen. The USD/JPY pair is now trading flat close to 113.40. Analysts assume the pair is on track to reach 114.00 in a few trading days. This scenario is favored by the progress in the US tax legislation and the policy meeting of the US central bank. The rate hike by the Fed has been already priced in by the markets. However, some economists are warning that the regulator could announce a slower pace of monetary tightening next year. So, the US dollar might sag initially after the press conference amid a drop in demand.
Interestingly, the US currency is not advancing across the board. Today, the Russian ruble is the main rival of the greenback. The USD/RUB pair opened below 59.00 at the Moscow Exchange. The Bank of Russia is holding a meeting on Friday. Market participants expect the central bank to lower the key interest rate to 8% from 8.25%. Apart from the policy meeting, the ruble finds support from Crude Oil as its prices have been rapidly increasing. Brent Crude Benchmark is trading higher at $65.30 a barrel. Brent Futures received a boost from a report that a major North Sea pipeline will be shut down for weeks to repair a leak.
Meanwhile, West Texas Intermediate has also settled up at $58.40 a barrel. Energy investors are anticipating data on US oil inventories from the American Petroleum Institute in the hope of a big drawdown. Experts say that the rapid oil rally is the main catalyst for the strength of the Russian ruble. The producer price data is due in the US later today. Even strong readings are unlikely to change the bearish sentiment on the USD/RUB pair.
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