Shafaq News / The Iraqi Central Bank’s (CBI) sales surged to over $240 million in today’s currency auction.

Our correspondent reported that CBI sold $240,715,778 in its auction for buying and selling the US dollar today.

The bank covered these sales at the exchange rate of 1,305 IQD per dollar for documentary credits and international settlements for electronic cards, and at 1,310 IQD per dollar for foreign transfers and cash transactions.

Most of the bank’s dollar sales were directed towards bolstering balances abroad in the form of transfers and credits, totaling $230,445,778, representing a 96% increase compared to cash sales, which amounted to $10,270,000.

Furthermore, Three banks purchased cash dollars, while 17 banks met requests to bolster balances abroad.

The total number of exchange companies and intermediaries participating in the auction was 38 companies.

Noteworthy, CBI conducts regular currency auctions to manage the country’s monetary policy and stabilize the exchange rate of the local currency.

These auctions serve as a mechanism for banks and financial institutions to buy and sell foreign currency, primarily the US dollar, to meet the demands of importers, travelers, and other entities requiring foreign exchange.

The auctions are a crucial tool for CBI to control inflation, manage liquidity in the banking system, and maintain confidence in the national currency.

Additionally, the auctions play a role in regulating the flow of foreign currency in and out of the country, helping to manage Iraq’s balance of payments.

Monitoring the results and trends of these auctions provides insights into the overall economic health and stability of Iraq’s financial system.

If the RBA delivers a hawkish verdict, AUDUSD will almost certainly rally—possibly above 0.66400. Conversely, should the RBA indicate the preparedness to cut the rates in summer, AUDUSD may trend lower or stabilise in the 0.65200 – 0.66000 range.

Federal Reserve

The most important event of the week will be the Fed’s policy rate decision, which is due on Wednesday at 6:00 p.m. UTC. The U.S. central bank is arguably the most important central bank in the world as it issues the world’s reserve currency, the U.S. dollar. Therefore, its decisions are always highly anticipated by the market, and, in fact, they often overshadow the decisions of other central banks.

This time, however, the Fed’s decision is even more important because it will be accompanied by the publication of the latest FOMC Economic Projections report. This report is critical for the market because it includes the ‘dot plot’, showing how each Fed member projects future interest rates. The Fed only publishes its projections four times a year so that investors will study them carefully.

Last time, 17 of 19 Fed officials projected lower interest rates by end-2024, effectively providing a green light for traders to price in a more aggressive Fed cutting cycle. On the day the Fed telegraphed its previous projections, gold price (XAUUSD) rallied more than 2% and then increased by another 3% throughout ten trading sessions. So the importance of the upcoming Fed’s decision should not be underestimated.

According to Reuters, analysts expect the Fed to maintain its Funds Target Rate in the 5.25 – 5.50% range. However, the market expects roughly 75 bps worth of rate cuts in 2024. Thus, traders are not positioned to see a ‘hawkish surprise’ from the Fed. It is a risky position because surprise may be coming as inflation remains sticky. The latest U.S. Consumer Price Index (CPI) came out higher than expected, while the Producer Price Index (PPI) accelerated to 1.6% in February (from 0.9% in January).

Overall, the Fed is likely to err on the side of caution and strike a delicate balance, indicating that while inflation remains a problem, rate cuts in 2024 are not out of the question. Still, investors will probably have to push back their expectations for an early rate cut, and the probability of a 25-bps rate reduction in June may decrease. In this case, XAUUSD will probably correct to the downside—possibly towards the 2,140 – 2,130 area.

Swiss National Bank

SNB’s decisions rarely move the markets sharply. However, the Swiss franc (CHF) may devalue if the SNB announces a rate cut or gives a dovish message on Thursday at 8:30 am UTC. The probability of a 25-bps rate cut currently stands at 33%, but most market participants expect the first rate cut in June. Indeed, SNB is likely to hold the rates steady at its next meeting as monthly inflation accelerated to 0.6% in February. Projecting what would happen to USDCHF after the SNB decision is tough because the Fed’s decision will overshadow it. The key levels to watch are 0.87000 on the downside and 0.89000 on the upside.

Bank of England

The week will wrap up with the BOE’s verdict, due on Thursday at 12:00 p.m. UTC. GBPUSD has recently managed to escape its three-month-old trading range and set an eight-month high. However, the pair has been on the downside lately as inflation figures from the U.S. disappointed investors, while the U.K. labour market showed signs of weakness. According to the interest rates swaps market data, investors are pricing in roughly 60 bps worth of rate cuts by BOE in 2024, with the first rate cut anticipated in either June or August.

As in the case of SNB, the BOE’s decision will be preceded by the Fed’s decision, so it is difficult to forecast where GBP pairs will move on Thursday. However, traders are advised to monitor any shift in BOE’s Monetary Policy Committee (MPC) rate voting. Previously, two MPC members voted for a rate hike and one for a rate hike. If the number of doves within the MPC increases, GBP will take a hit.

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The price of the dog-themed cryptocurrency Shiba Inu (SHIB) has dipped in the last few days in response to profit-taking.

If today closes in red, SHIB would mark its third consecutive day of losses, culminating in a 29% decline weekly. At the time of writing, SHIB was down 15% in the last 24 hours to $0.00002476.

Shiba Inu’s decline comes amid a broader drop in the crypto markets at the week’s close, as investors considered the outlook for interest rates after inflation data released Thursday came in higher than expected.

Despite the recent price dip, the dog-themed cryptocurrency has managed to hold its footing at a crucial 81 trillion SHIB level, a testament to its resilience in a fluctuating market.

According to IntoTheBlock data, where Shiba Inu currently trades, 81.94 trillion SHIB was bought by 115,950 addresses between the price range of $0.000022 and $0.000028 at an average price of $0.000025.

Maintaining this level is crucial for the confidence of SHIB holders, as it signals stability and potential for recovery.

A somewhat weak support exists away from the SHIB present price level, where 35.53 trillion SHIB were purchased by 29,290 addresses for an average price of $0.000021 in the $0.000019 to $0.000022 range.

This is due to Shiba Inu’s rapid advance at the start of March, which left it with little time to build support around its current trading range.

Moving ahead, Shiba Inu faces a lesser hurdle between $0.000028 and $0.000031, with 15.31 trillion SHIB purchased among 39,310 addresses at an average price of $0.000029.

Looking ahead, the ability of Shiba Inu to sustain the 81 trillion SHIB level will be closely watched by the crypto community.