The index of US dollar has been rising before after an announcement of the FOMC meeting result yesterday. However, it declined again to 93.20 in a trading happened some days ago. 

When this news was written in the middle of the European session, the DXY has been coming back the the well-formed consolidation range. It was since at the beginning of the week. 

The reason was the market which was more affected by the global risk sentiment fluctuation than the Fed’s decision which has been counted in their currency exchange since many long time. 

The People's Bank of China (PBoC) injected 90 billion yuan into its banking system through a repo facility. That is an anticipation of one of the largest debt restruksturizations in history. 

The Equity Market Continues It’s Rally

The move reduces anxiety related to the domino effect of evergrande's giant debt problem which is now highlighted. The stock market squirmed again, as did the commodity currencies. 

In contrast, safe haven assets such as the greenback receded for a while. The equity market continues their rally to the wall of concern just like what people are predicted in a carry trade. 

Galy said that the negative news is now being ignored. That can even viewed positively because it may encourage the governments and central banks to channel their stimulus. 

In fact, the global economy is slowing faster than a previously thought. He thinks that the unpleasant reality will eventually come back to the fore, but not now.

The Market Early is too Early

A number of other analysts considered the market relief related to the Evergrande issue likely too early. There has been no word on how that company will pay the $83.5 million bond interest bill.

That is counted due today — with a 1-month grace period — . Moreover, Evergrande also has a bond interest bill worth USD47.5 million due next week. Kerry Craig as an expert said something. 

He said that people may see some short term concerns about the fading domino effect. However, that will still become a problem because the property and construction markets are the huge parts. 

It is especially in the China’s economy. The Bank of England (BOE) policy which was announced on Thursday showed the hawkish view so far. 

The Interest Rate is Maintained 

That institution maintain their interest rate at a low level which is 0.1%. However, that central bank underlined that the inflation increase in the United Kingdom is quite high. 

The inflation projection for the end of this year will be also increased for more than 4 percent. BOE is still stating that the rising above is maybe just temporary. 

However, two of the 9 MPC members - Dave Ramsden and Michael Saunders - voiced that the pandemic-era bond-buying program be ended early. It was based on a reason. 

According to the minutes of the BoE meeting, the two men have seen an increase in evidence from various cost and inflation indicator. That is in the globally and domestically Scale. 

The Current Expectation Made by the Market

The condition above makes the inflationary pressures are likely to persist at high levels. This supports the market to expect if the BoE interest rate will rise at least starting in March or mid-2022. 

It is clear that the committee's (assessment) of how big a problem the rise in inflation has raised has been divided. They made several predictions about that

However, given the many headwinds facing the economy this winter, the analysts think a rate hike is unlikely until the second half of 2022. Meanwhile, the GBP/USD is rising. 

Poundsterling was up for more than one percent after the monetary policy announced by BOE this time. The GBP/USD pair continues to be stronger and sold around the level of 1.3738.