U.S. Dollar Weakens After Dovish Fed Statement
27 Juillet 2017 - 05:53AM
RTTF2
The U.S. dollar slipped against its major counterparts in the
Asian session on Thursday, after the Federal Reserve gave a
cautious assessment on inflationary outlook, casting uncertainty
over the timing over the next interest rate hike.
The Federal Open Market Committee decided to maintain its key
interest rate at a 1.00 to 1.25 percent range and announced plans
to begin to unwind its bloated balance sheet "relatively soon"
The Fed's accompanying statement acknowledged inflation was
"running below 2%" instead of "running somewhat below 2%," a
downbeat assessment compared to the June statement.
With the language on inflation being more dovish than the June
statement, most economists are of the view that it may delay its
next interest rate hikes, possibly into next year.
Investors await U.S. durable goods for June and weekly jobless
claims later in the day for more clues about the economy.
The greenback dropped on Wednesday after the Fed announcement.
It shed 0.6 percent against the yen, 0.2 percent against the franc,
0.7 percent each against the euro and the pound for the day.
The greenback fell to a 2-1/2-year low of 1.1777 against the
euro and a 10-month low of 1.3157 against the pound, from
Wednesday's closing quotes of 1.1734 and 1.3118, respectively. The
greenback is seen finding support around 1.19 against the euro and
1.32 against the pound.
The greenback dropped to a 3-day low of 110.78 against the yen
and a 2-day low of 0.9490 versus the Swiss franc, from yesterday's
closing quotes of 111.17 and 0.9507, respectively. If the greenback
extends decline, 109.00 and 0.93 are likely seen as its next
support levels against the yen and the franc, respectively.
The greenback edged down to 1.2414 against the Canadian dollar,
from yesterday's closing value of 1.2446. The next possible support
for the greenback-loonie pair is seen around the 1.23 region.
The greenback that Wednesday's deals at 0.7521 against the kiwi
and 0.8004 against the aussie slipped to near 2-year lows of 0.7558
and 0.8066, respectively. Continuation of the greenback's downtrend
may see it challenging support around 0.77 against the kiwi and
0.83 against the aussie.
Looking ahead, Eurozone M3 money supply data for June is due to
be released later in the day.
In the New York session, U.S. preliminary durable goods orders
for June, U.S. weekly jobless claims for the week ended July 22,
U.S. advance goods trade balance for June and preliminary wholesale
inventories for June are slated for release.
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