U.S. Dollar Advances On Fed Rate Hike Signal In Dec.
September 21 2017 - 1:12AM
RTTF2
The U.S. dollar climbed against most major counterparts in early
European deals on Thursday, as the Federal Reserve stuck to its
plan for raising the interest rate again later this year and
decided to begin the reduction of balance sheet from October.
The U.S. Federal Reserve left interest rates unchanged at a
range of 1 percent to 1.25 percent.
As expected, the Fed announced that it would begin shrinking its
$4.5 trillion balance sheet starting October, but said the process
would be gradual and predictable, initially allowing $10 billion in
bonds to roll off each month.
The Fed maintained projections for another rate hike by the end
of the year and three additional hikes in 2018, brushing aside
concerns over the impact of subdued inflation and recent
hurricanes.
"We anticipate that core and headline inflation will move up
close to our 2 percent objective next year...the shortfall this
year is due to transitory factors that are likely to disappear over
the course of the coming year," Fed Chair Janet Yellen said at a
press conference.
The currency has been trading in a positive territory in the
Asian session, with the exception of the pound.
The greenback rose to 1.3483 against the pound, after having
fallen to 1.3514 at 2:30 am ET. On the upside, 1.32 is likely seen
as the next resistance level for the greenback.
The greenback advanced to more than a 2-month high of 112.72
versus the yen and more than a 5-week high of 0.9743 against the
Swiss franc, from Wednesday's closing values of 112.21 and 0.9698,
respectively. The next possible resistance for the greenback is
seen around 114.00 against the yen and 0.99 against the franc.
The greenback firmed to a 3-day high of 0.7946 against the
aussie and a 2-day high of 0.7299 against the kiwi, off its early
lows of 0.8036 and 0.7364, respectively. If the greenback rises
further, 0.77 and 0.71 are likely seen as its next resistance
levels against the aussie and the kiwi, respectively.
On the flip side, the greenback fell to 1.1914 against the euro,
from a high of 1.1866 hit at 7:45 pm ET. The greenback is likely to
challenge support around the 1.21 area.
Looking ahead, Canada wholesale sales for July, Eurozone flash
consumer sentiment for September, U.S. weekly jobless claims for
the week ended September 16, house price index for July and leading
indicators for August are set for release in the New York
session.
At 9:30 am ET, the European Central Bank President Mario Draghi
speaks at the European Systemic Risk Board annual conference, in
Frankfurt.
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