U.S. Dollar Strengthens Ahead Of Fed Minutes

01:51, 20th August 2014

(RTTNews) - The U.S. dollar strengthened against the other major currencies in the Asian session on Wednesday ahead of the release of minutes from the Federal Reserve's recent policy meeting, due later in the day.

At 2:00 pm ET, U.S. Federal Reserve will release the minutes from the July 29-30 Federal Open Market Committee meeting.

Investors may sift through the minutes for more clues on the outlook for U.S. interest rates after data yesterday showed inflation remains below target, even as the housing market gathers steam.

On Tuesday, the currency rose as strong U.S. housing data bolstered expectations for an earlier-than-expected rate hike by the Federal Reserve.

The report said housing starts jumped 15.7 percent to an annual rate of 1.093 million in July after falling 4 percent to a revised 945,000 in June. Economists had been expecting housing starts to climb to a rate of 963,000 from the 893,000 originally reported for the previous month.

Fed Chair Janet Yellen, who said earlier that the key rates will stay low for some time after the conclusion of asset purchases, will speak on labor markets on Friday at the Fed Bank of Kansas City's economic symposium in Jackson Hole, Wyoming.

The U.S. dollar rose to a 9-month high of 1.3302 against the euro, from an early low of 1.3323. If the greenback extends its uptrend, it is likely to find resistance around the 1.32 area.

Against the yen and the pound, the greenback advanced to 4-1/2-month highs of 103.22 and 1.6602 from early lows of 102.88 and 1.6623, respectively. The greenback may test resistance near 103.40 against the yen and 1.65 against the pound.

Moving away from an early low of 0.9089 against the Swiss franc, the greenback rallied to a 2-week high of 0.9105. On the upside, 0.911 is seen as next resistance level for the greenback.

Looking ahead, German producer price index for July is due in the European session.

At 4:30 am ET, the Bank of England will release the minutes of the August monetary policy meeting.

In the New York session, Canada wholesale sales data for June is due to be released.