News Column

US Dollar Rises After Fed Minutes

August 20, 2014

BRUSSELS (Alliance News) - The US dollar strengthened against the other major currencies in the Asian session on Thursday after the release of US Federal Reserve's minutes from the July 29-30 Federal Open Market Committee meeting.

The minutes released earlier on Wednesday signaled the potential for an earlier-than-expected hike in interest rates.

Amid robust signs from the labor market moving closer to normal, the Fed does not want a planned rate hike until the recovery looks more convincing, the minutes showed.

At the meeting, the FOMC voted 9-1 to maintain its current policy of gradually withdrawing stimulus.

Fed Chair Janet Yellen will speak on the labor market on Friday at the Kansas City Federal Reserve Bank's economic symposium in Jackson Hole, Wyoming. Traders look ahead to the speech for further cues on the monetary policy outlook.

The US dollar rose to nearly a 1-year high of 1.3241 against the euro, from an early low of 1.3259. At yesterday's close, the greenback was trading at 1.3319 against the euro. If the greenback extends its uptrend, it is likely to find resistance around the 1.322 area.

Against the Swiss franc, the greenback appreciated to a 7-month high of 0.9150, from an early low of 0.9132. The pair was quoted at 0.9092 at yesterday's close. On the upside, 0.92 is seen as next resistance level for the greenback.

The greenback rallied to a 4-1/2-month high of 1.6577 against the pound, from an early low of 1.6599. The greenback may test resistance near the 1.652 region.

Moving away from an early low of 103.66 against the yen, the greenback advanced to a 4-1/2-month high of 103.95. Continuation of the bullish trend may lead the greenback to a resistance around the 104.02 mark.

Data from Markit Economics showed that the manufacturing sector in Japan continued to expand at an accelerating pace in August - with a score of 52.4. That handily beat forecasts for a score of 51.5 following the 50.5 reading in July.

Looking ahead, Swiss trade data for July is due at 2:00 am ET.

In the European session, PMIs from major European economies for August, UK retail sales data and public sector net borrowing for July are due to be released.

In the New york session, US weekly jobless claims for the week ended August 16, Markit's manufacturing US PMI for August, existing home sales and Conference Board's US leading indicator index for July and Eurozone consumer sentiment index for August are due to be released.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Alliance News

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters