Daily Report: EUR/USD, GBP/USD, USD/JPY And NZD/USD : September 20, 2013

The U.S. Dollar came close to trading at a seven-month low after the Federal Reserve issued a much anticipated statement confirming that it would not begin scaling back on stimulus at this time, given the fact that the economy hasn’t shown strong indications of improvement. Policy makers indicated that they wanted further evidence of economic recovery before reducing the $85 billion in monthly bond purchases. The greenback remained weak and managed to rise slightly after reports published on Thursday revealed that the Jobless Claims went up, though less than forecast.

The Euro extended gains versus the British Pound, the Yen and U.S. Dollar as the U.S. indicated an increase in the Jobless Benefits applications last week. The Sterling rallied subsequent to the publication of the Bank of England’s minutes.

The Yen slipped to the lowest it has traded at in 3 ½ years versus the 17-nation currency as the Federal Reserve refrained from making changes to U.S. monetary Policy.

EUR/USD- Euro Hits 7-Month High

No major economic reports out of the Euro region were published yesterday, however the weak Dollar prompted the shared currency to trade at a seven-month high. Its rally occurred after the U.S. central bank announced that it would not be making any changes to the current set of monetary policy measures and would not consider raising the interest rate for some time to come.

GBP/USD- Retail Sales Reignite Concerns
The British Pound slumped after official news indicated that Retail Sales, including fuel sales, fell 0.9 percent since July. The Sterling soared on Wednesday after the Federal Reserve held off on reducing stimuli and as the Bank of England published its monetary policy meeting minutes, which confirmed that bank officials voted unanimously in favor of keeping the current asset purchasing program in place while maintaining the interest rates at 0.5 percent.

USD/JPY- Yen Dips On Sentiment
The Yen weakened against the greenback after the Federal Reserve announced its decision to refrain from cutting stimulus until it obtains clear signs of economic improvement. The Japanese currency had started to decline as market sentiment improved after news of the Fed decision was published. However, domestic reports out of Japan provided some support for the Yen. According to official data, the Trade Deficit contracted from JPY0.91 trillion to JPY0.79 trillion last month.

NZD/USD- Economy Grew
New Zealand’s currency traded at a four-month high versus its U.S. counterpart after the South Pacific nation reported that Gross Domestic Product rose 0.2 percent in the second quarter. According to Associate Finance Minister, Steven Joyce, most analysts had been predicting that the economy would show a contraction. Exports dropped 5.9 percent as shipments of meat and dairy products to other nations fell, while imports went up.

Today’s Outlook
Today’s economic calendar is extremely light. The Euro region will report on Italian Industrial Production and Consumer Confidence. The U.K. will issue data on Public Sector Net Borrowing.