'Report': Azerbaijani manat starts to weaken ahead of Fed meeting

Baku. 1 June. REPORT.AZ/ As likelihood of increase of interest rate by US Federal Reserve System (Fed) at the next meeting to be held on June 13-14, the position of the Azerbaijani manat against the US dollar started to weaken.

Report informs on May 27 declining exchange rate of the dollar to the level of 1.4830 AZN/USD, today the USD rate exceeded 1.50 AZN/USD.

If today morning selling rate was equal to 1,4950 AZN/USD, then in the afternoon it had already reached 1,5010 AZN/USD.

Notably, the rate has increased due to the fact that in the last two auctions, the CBA did not allow it to fall below the mark 1,49 AZN/USD. At yesterday's auction, commercial banks have not been able to buy the currency in sufficient quantity that yesterday and today it has led to increased demand for the dollar on the interbank market and the cash market.

Analytical Group of Report News Agency predicts strong demand for the dollar in the foreign exchange auction on June 2 and the implementation of inter-bank transactions at a higher rate.

It is expected that up to the Fed meeting the dollar will rise to the level of 1,52 AZN/USD, and the CBA will determine the future strategy, depending on the outcome of the meeting and the response of global financial markets.

Notably, with the approaching date of the meeting, the dollar on the global foreign exchange market continues to strengthen.Thus, the rate of USD/EUR, which is on May 3, was equal to 1.1615, dropped by 4% and reached 1.1155.This led to a weakening of the currency of several countries against the dollar.So, the Chinese yuan today approached the 6,5967 CNY/USD fixed on January 8, which is a five-year low.

There is a chance the dollar will rise in China to 6.80 yuan, which will affect all world currencies.