Today USD Rate: Fed Minutes Cap USD; Euro, GBP Firm
On Thursday, the U.S. dollar was flat after the release of Fed Reserve’s March meeting minutes.
The USD index that tracks the greenback against a basket of other currencies was down 0.04% trading at 96.523.
Minutes showed that majority policymakers expect the central bank to remain on pause for the rest of the year.
However, Fed officials were flexible for more rate hikes saying some policymakers under certain circumstances could “judge it appropriate to raise the target range for the fed funds’ rate modestly later this year.”
“Several participants noted that their views of the appropriate range for the federal funds rate could shift in either direction,” the minutes say.
On Wednesday, the IMF cut its forecast for world growth this year to the lowest since 2009, a mere 3.3%.
Meanwhile, the euro recovered some of its early losses in the wake of the European Central Bank’s firm decision on interest rates. The downbeat economic remarks from ECB President Mario Draghi played a role.
“Incoming data continue to be weak, especially for the manufacturing sector … The slower growth momentum is expected to extend into the current year,” Draghi said.
The EUR/USD pair last traded at 1.1280, up 0.1%.
The GBP/USD pair was also up 0.1% to 1.3103 after EU leaders, and the U.K. agreed to a “flexible extension ” of the Brexit deadline till Oct. 31, which Prime Minister Theresa May has accepted.
In a press conference after they reached the agreement, May said: “the choices we now face are stark, and the timetable is clear.” She acknowledged the “huge frustration” that the UK had not yet left the EU.
The USD/JPY pair edged up 0.1% to 111.07.
The AUD/USD pair and the NZD/USD pair were both down 0.1%.
The USD/CNY pair was mostly unchanged at 6.7121.
Today USD Rate: Growth woes douse rally in Asian shares, dollar slips
On Thursday, Asian stocks stepped back from near eight-month highs. The dollar eased as European, and U.S. central banks reinforced investor worries about the global economic outlook and trade protectionism.
In a fresh escalation of trade tensions, Trump has threatened new tariffs on goods from the EU even as the China-U.S. trade dispute remains unresolved.
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.3% after four straight days of gains took it to the highest since last August.
Chinese shares were subdued with the blue-chip CSI300 off 1% while Hong Kong’s Hang Seng index stumbled 0.6%.
Australian shares also lost ground, pressured by political uncertainty after the country’s prime minister called a national election for May 18.
Japan’s Nikkei fell 0.3% as the yen strengthened.
On Wednesday, the European Central Bank (ECB) kept its loose policy stance and warned that threats to global economic growth remained. The ECB has already pushed back its first post-crisis interest rate hike. President Mario Draghi raised the prospect of more support for the struggling eurozone economy if its slowdown persisted.
Separately, data showed U.S. consumer prices increased by the most in 14 months in March, but underlying inflation remained benign against a backdrop of slowing global economic growth.
U.S. Treasury yields slipped in response, reinforcing expectations that the Fed would hold rates steady or possibly cut them by the end of the year.
Those expectations helped European and U.S. shares overnight. On Wall Street, the S&P 500 added 0.35%, the Nasdaq climbed 0.7% while the Dow barely changed.
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