Dollar Higher Ahead Of Fed Decision
December 17 2014 - 8:06AM
RTTF2
The U.S. dollar was broadly higher against most major opponents
in European deals on Wednesday, as the traders await the outcome of
the Federal Reserve's monetary meeting due later in the day, for
clues regarding its interest rate hike.
The Federal Reserve is scheduled to release the post meeting
policy statement and updated forecasts at 2 pm ET. This will be
followed by Fed Chair Janet Yellen's customary press conference at
2:30 pm ET.
Most market participants expect the Fed to change its
forward-looking policy statement by removing language that it
expects to keep interest rates low "for a considerable period."
Strong economic growth in the third quarter and sustained
strength in labour market could press the policy makers to go ahead
with their plan, notwithstanding low inflation rate.
The Fed is expected to raise its rate in mid-2015, according to
its September forecasts.
The greenback was lower on Tuesday overnight, amid weak housing
data and on global growth concerns.
After advancing to 117.49 against the yen in early European
deals, the greenback consolidated around the 117.00 range. The pair
ended Tuesday's trading at 116.38.
The greenback rose to 0.9648 against the Swiss franc and 1.2445
against the euro, compared to yesterday's closing values of 0.9597
and 1.2508, respectively. The next possible resistance levels for
the greenback may be found around 0.975 against the franc and 1.23
against the euro.
On the flip side, the greenback that reversed from an early high
of 1.5676 against the pound edged down to 1.5735, and held steady
thereafter. The pair finished yesterday's trading at 1.5747.
Bank of England policymakers decided to leave its key rate at a
historic low of 0.50 percent in a split vote for the fifth straight
time at the meeting held on December 3 and 4.
The Monetary Policy Committee voted 7-2 to retain its key rate
at 0.50 percent. Ian McCafferty and Martin Weale sought a 25
basis-point hike for the fifth straight meeting.
Looking ahead, U.S. CPI for November and Canada wholesale sales
for October are due in the New York session.
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