U.S. Dollar Extends Slide After Fed Rate Decision
22 September 2016 - 04:11AM
RTTF2
The U.S. dollar continued to be weak against the other major
currencies in the Asian session on Thursday, after the Federal
Reserve kept interest rates unchanged and hinted at a rate hike
before the end of the year. The Federal Reserve voted to keep
interest rates unchanged Wednesday afternoon, but there was
dissention in the ranks.
The vote was 7-3, with three FOMC members wanting to raise
rates. Esther George, Loretta Mester and Eric Rosengren all
signaled their preference for tightening in recent public
remarks.
In its statement, the Fed policy committee said "the case for an
increase in the federal funds rate has strengthened but decided,
for the time being to wait for further evidence of continued
progress toward its objectives."
Meanwhile, Crude oil for November delivery are currently up
$0.45 to $45.79 a barrel. Crude oil futures surged after the
government said U.S. oil inventories plunged last week.
The U.S. Energy Information Administration reported a 6.2
million barrel decline in the weekly crude inventories, confirming
a similar reading from the American Petroleum Institute on
Tuesday.
Traders also reacted as the Federal Reserve decided against a
September rate hike.
Although the currency fell against the other major rivals after
the Fed rate decision in the late New York session, it was higher
on Wednesday.
Thursday, the U.S. dollar rose 0.31 percent against the euro,
0.31 percent against the pound, 0.04 percent against the Swiss
franc, and 0.70 percent against the yen.
In the Asian trading, the U.S. dollar fell to 2-day lows of
1.1202 against the euro and 1.3058 against the pound, from
yesterday's closing quotes of 1.1185 and 1.3027, respectively. If
the greenback extends its downtrend, it is likely to find support
around 1.13 against the euro and 1.35 against the pound.
The greenback dropped to 0.9726 against the Swiss franc, from an
early high of 0.9741. The greenback is likely to find support
around the 0.96 area.
Against the yen, the Australian and the Canadian dollars, the
greenback slipped to nearly a 4-week low of 100.09, nearly a 2-week
low of 0.7649 and a 9-day low of 1.3060 from yesterday's closing
quotes of 100.31, 0.7621 and 1.3100, respectively. On the downside,
99.00 against the yen, 0.77 against the aussie and 1.28 against the
loonie are seen as the next support levels for the greenback.
The greenback edged down to 0.7368 against the NZ dollar, from
an early high of 0.7316. This compares with an early near 2-week
low of 0.7369. The greenback is likely to find support around the
0.75 region.
The Reserve Bank of New Zealand kept its Official Cash Rate at
the record low of 2.00 percent. The decision was in line with
expectations after the central bank trimmed its benchmark by 25
basis points in August after holding fire for two straight
months.
Looking ahead, European Central Bank releases its economic
bulletin in Frankfurt at 4:00 am ET. Bank of England Financial
Policy Committee statement is due to be published at 4:30 am
ET.
In the New York session, U.S. weekly jobless claims for the week
ended September 17, U.S. existing homes sales data for August, U.S.
FHFA house price index for July, U.S. leading indicators for August
as well as Eurozone consumer confidence index for September are
slated for release.
At 9:00 am ET, European Central Bank President Mario Draghi,
Vice Presidents Valdis Dombrovskis and Vitor Constancio are
expected to speak at the European Systemic Risk Board annual
conference in Frankfurt.
At 9:30 am ET, Bank of England Deputy Governor Jon Cunliffe is
expected to participate in a panel discussion at the European
Systemic Risk Board in Frankfurt.
At 1:00 pm ET, Bank of England Governor Mark Carney will deliver
a presentation titled "Arthur Burns memorial lecture," in Berlin.
At the same time, BOE MPC Member Kristin Forbes will deliver a
speech at Imperial College in London.
The Japanese market is closed in observance of Autumnal Equinox
day holiday.
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