U.S. Dollar Falls Ahead Of Fed Decision
July 26 2017 - 4:31AM
RTTF2
The U.S. dollar dropped against its most major counterparts in
the European session on Wednesday, as investors await monetary
policy announcement by the US Federal Reserve for more clarity on
the balance sheet normalization and its plans for future rate hike
amid softness in inflation.
The Federal Open Market Committee will release its monetary
policy statement at 2:00 pm ET, with economists expecting it to
leave interest rates unchanged. The Fed had lifted the target range
for its federal funds rate to 1% to 1.25% during its meeting in
June.
Despite softness in inflation, the Fed is expected to keep the
road for a December rate hike open.
Market participants await more information on the timing of the
start of the balance sheet "normalization," which it had formalized
in the June meeting.
Investors also await U.S. new home sales for June due at 10:00
am ET. Economists expect the indicator to rise to 615,000 on month,
compared to a reading of 610,000 in May.
U.S. Senate Republicans narrowly agreed on Tuesday to open
debate on healthcare reform, but rejected the first proposed
amendment to repeal and replace Obamacare.
President Donald Trump said this was a big step and he was
grateful towards Senator McCain who lent his support to the
revoking of the bill.
The greenback traded mixed against its major rivals in the Asian
session. While the greenback held steady against the euro, franc
and the pound, it rose against the yen.
Having advanced to a 6-day high of 112.09 against the Japanese
yen at 8:00 pm ET, the greenback reversed direction and retreated
to 111.72. If the greenback-yen pair extends slide, 110.00 is
likely seen as its next support level.
Survey data from Shoko Chukin Bank showed that Japan's small
business confidence strengthened for the third straight month in
July.
The small business sentiment index rose to 50.0 in July from
49.2 in the previous month. However, the score is forecast to fall
to 49.1 in August.
The greenback eased to 1.3062 against the pound and 1.1651
against the euro, off its early 2-day high of 1.3002 and a 6-day
high of 1.1613, respectively. Further weakness may take the
greenback to support levels of 1.32 around against the pound and
1.19 versus the euro.
The greenback edged down to 1.2502 versus the loonie, 0.7435
versus the kiwi and 0.7925 versus the aussie, from its early highs
of 1.2519 and 0.7409, and a 5-day high of 0.7878, respectively.
Continuation of the greenback's downtrend may see it challenging
support around 1.24 against the loonie, 0.76 against the kiwi and
0.805 against the aussie.
On the flip side, the greenback strengthened to a 6-day high of
0.9595 against the Swiss franc, from a low of 0.9515 hit at 5:00 pm
ET. Next likely resistance for the greenback-franc pair is seen
around the 0.97 region.
Survey data from the UBS investment bank showed that the Swiss
consumption indicator remained broadly stable in June signaling
subdued growth in private spending in recent months.
The consumption indicator rose marginally to 1.38 in June from
revised 1.32 in May.
Sterling vs US Dollar (FX:GBPUSD)
Forex Chart
From Apr 2024 to May 2024
Sterling vs US Dollar (FX:GBPUSD)
Forex Chart
From May 2023 to May 2024
