U.S. Dollar Climbs Ahead Of Fed Minutes
August 21 2019 - 2:16AM
RTTF2
The U.S. dollar strengthened against its major counterparts in
the early European session on Wednesday, as investors await the
release of Fed minutes from the July meeting later in the day for
more clues about further rate cuts in coming months.
The Fed reduced rate by 25 basis point at its meeting on July
30-31, citing external threats to economy and weak inflation.
It was the first rate cut since 2008.
Chairman Jerome Powell referred the rate cut as a "mid-cycle
adjustment" and not the beginning of an easing cycle.
The key risk event this week is the Jackson Hole symposium,
where Powell is set to speak on monetary policy challenges on
Friday.
His comments are keenly awaited after last week's U.S. bond
yield curve inversion increased expectations of a 25 basis point
cut at the September meeting.
On the economic front, U.S. existing home sales for July will be
featured at 10:00 am ET.
The currency has been trading in a positive territory against
its major counterparts in the Asian session, excepting the
euro.
The greenback appreciated to 1.2128 against the pound, from a
low of 1.2175 seen at 10:00 pm ET. The next likely upside target
for the greenback is seen around the 1.19 level.
Figures from the Office for National Statistics showed that the
UK budget balance showed a surplus in July.
Public sector net borrowing excluding public sector banks was in
GBP 1.3 billion surplus. Nonetheless, this was smaller by GBP 2.2
billion from July 2018 and also remained below economists' forecast
of GBP 2.7 billion.
The greenback rose to 0.9806 against the franc, following a
2-day decline to 0.9772 at 5:30 pm ET. The greenback is seen
finding resistance around the 1.00 level.
After a decline to 106.22 against the yen at 5:00 pm ET, the
greenback reversed direction and advanced to 106.60. Next key
resistance for the greenback is seen around the 108.00 region.
The greenback firmed to 0.6396 against the kiwi, compared to
0.6415 hit late York Tuesday. The greenback is likely to face
resistance around the 0.62 level.
In contrast, the greenback eased off to 1.1106 against the euro,
from a high of 1.1088 it touched at 3:00 am ET. The greenback is
poised to find support around the 1.14 level.
Extending early slide, the greenback declined to a 2-day low of
1.3296 against the loonie. Should the greenback drops further, it
may face support around the 1.31 level.
The greenback pared gains to 0.6789 against the aussie, from a
high of 0.6773 hit in the Asian session. Further downtrend is
likely to take the greenback to a support around the 0.71
level.
Looking ahead, Canada consumer prices and U.S. existing home
sales for July are scheduled for release in the New York
session.
At 2:00 pm ET, the Fed release minutes from the July 30-31
meeting.
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