U.S. Dollar Lower As Fed Hints At Rate Cut
June 19 2019 - 10:40PM
RTTF2
The U.S. dollar fell against its major counterparts in the Asian
session on Thursday, after the Fed left its interest rates
unchanged and signaled the possibility of rate cuts amid trade
tensions and soft inflation.
The Fed asserted that it will "act as appropriate" to sustain
the U.S. economic expansion amid increasing uncertainties about the
outlook for the economy.
The central bank omitted its reference to remaining "patient"
when determining future changes to interest rates.
In his post-meeting press conference, Fed Chairman Powell said,
"Many participants believe that some cut to the fed funds rate
would be appropriate in the scenario they see as most likely."
CME Group's FedWatch Tool currently indicates an 85.2 percent
chance the Fed will cut rates by 25 basis points at its next
meeting at the end of July.
The greenback fell to a weekly low of 1.2689 against the pound
and a 6-day low of 1.1273 against the euro, off its early highs of
1.2629 and 1.1226, respectively. The next possible support for the
greenback is seen around 1.28 against the pound and 1.14 against
the euro.
Reversing from its early highs of 108.14 against the yen and
0.9944 against the franc, the greenback declined to a 5-1/2-month
low of 107.55 and a 9-day low of 0.9897, respectively. On the
downside, 106.00 and 0.96 are possibly seen as the next support
levels for the greenback against the yen and the franc,
respectively.
The greenback slipped to a 3-1/2-month low of 1.3234 against the
loonie and a weekly low of 0.6582 against the kiwi, pulling back
from its previous highs of 1.3286 and 0.6534, respectively. If the
greenback falls further, 1.30 and 0.68 are likely seen as its next
possible support levels against the loonie and the kiwi,
respectively.
The greenback edged lower to 0.6907 against the aussie, from a
high of 0.6878 set at 5:00 pm ET. The greenback is seen finding
support around the 1.30 level.
Looking ahead, U.K. retail sales for May will be out in the
European session.
The Bank of England's monetary policy decision is due at 7:00 am
ET. The bank is expected to leave rates unchanged at 0.75 percent
and asset purchase target at GBP 435 billion.
The U.S. weekly jobless claims for the week ended June 15 and
leading index for May will be released in the New York session.
At 10:00 am ET, Eurozone flash consumer sentiment index for June
is set for release.
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