U.S. Dollar Advances Ahead Of Fed Minutes
August 16 2017 - 4:12AM
RTTF2
The U.S. dollar climbed against its most major opponents in the
European session on Wednesday, as investors look forward to the
minutes from the Fed's latest meeting for clues about the
commencement of balance sheet normalization and prospects of
another interest rate hike this year.
The minutes, due at 2:00 pm ET, could shed more information
regarding the plan to begin reducing the Fed's massive $4.5
trillion balance sheet. The statement may offer more insights about
the Fed's thinking on the state of the U.S. economy and prospects
of another rate rise later this year.
At the July 25-26 meeting, the FOMC kept the target range for
the federal funds rate unchanged at 1.00-1.25 percent. The Fed also
said that it would begin shrinking the Fed's balance sheet
"relatively soon.
Other economic releases include the U.S. housing starts and
building permits for July, due at 8:30 am ET.
The greenback was higher on Tuesday, as U.S. retail sales beat
forecasts in July and the New York Fed President William Dudley
backed another rate hike this year.
The currency held steady against its major rivals in the Asian
session, barring the Japanese yen.
The greenback edged up to 0.9756 against the Swiss franc and
held steady thereafter. The next possible resistance for the
greenback-franc pair is seen around the 0.99 region.
The greenback climbed to 1.1691 against the euro, after having
fallen to 1.1758 at 3:30 am ET. On the upside, 1.15 is possibly
seen as the next resistance level for the greenback.
Flash estimate from Eurostat showed that the euro area economy
expanded as initially estimated in the second quarter.
Gross domestic product grew 0.6 percent quarter-on-quarter,
slightly faster than the 0.5 percent increase seen in the first
quarter.
The greenback firmed to near a 2-week high of 110.95 against the
Japanese yen, compared to 110.66 hit late New York Tuesday. The
greenback is seen finding resistance around the 112.00 region.
On the flip side, the greenback weakened to 1.2903 against the
pound, off early 5-week high of 1.2842. Continuation of the
greenback's downtrend may see it challenging support around the
1.30 area.
Data from the Office for National Statistics showed that the UK
unemployment rate declined in the second quarter.
The ILO unemployment rate fell to 4.4 percent in the second
quarter from 4.9 percent a year ago. This was the lowest since
1975.
The greenback also fell to 0.7866 against the aussie, 1.2720
against the loonie and 0.7253 versus the kiwi, from its early highs
of 0.7817 and 1.2770 and a 5-week high of 0.7223, respectively. The
greenback may possibly locate support around 0.795 against the
aussie, 1.26 against the loonie and 0.74 against the kiwi.
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