The dollar fell against a basket of currencies in early Asian session, continuing its steady decline since Tuesday. Wednesday’s FOMC meeting minutes did not add anything new to the outlook provided in the statement that came out after the June 17 meeting. While some FOMC members were with the view that the conditions for raising rates would be met shortly, most FOMC members consider it too early to judge whether the conditions have improved enough to start increasing rates. The greenback was trading slightly lower against the euro in late Asian session at 1.1084.
There was relief in China after efforts by Chinese authorities to bolster the stock market finally appeared to be lifting share prices. China’s two main indices, the Shanghai Composite and the CSI 300 index were both up more than 6% on Wednesday. Authorities in recent days have taken several measures to increase liquidity such as easing margin requirements, banning the sale of shares by large listed companies and buying shares through a state-back fund. In other news for China, annual inflation rose to 1.4% in June, which is slightly above forecasts of 1.3%.
The yen eased in Asian trading after making strong gains in recent days as investors sought safety in the Japanese currency on worries over China and Greece. Strong core machinery orders had little effect on the yen, which rose by 0.6% in May, versus estimates they would fall by 4.8%. This lowered expectations that the Bank of Japan would provide further monetary easing anytime soon. The yen dropped to 121.32 per yen against the dollar and to 134.47 per yen against the euro.
The Australian dollar was given a boost from stronger-than-expected employment data. Unemployment in Australia came in at 6.0%, against forecasts of a 6.1% rate. The previous month’s figure was revised down to 5.9% from 6.0%. The aussie climbed to 0.7475 against the greenback and got additional support from the recovery in Chinese share indices.
The pound got little support from Wednesday’s UK budget, which was broadly positively received. Sterling stayed flat against the euro in Asian trade and was unable to reverse yesterday’s losses. It was last trading at 0.7198 per euro. But against the dollar, it was firmer, rising to 1.5394.
Coming up for the rest of the day are the weekly initial jobless claims for the US and the Bank of England’s June monetary policy decision. Meanwhile, Greece is expected to submit a detailed proposal for a new bailout program following a formal request yesterday to the European Stability Mechanism for further assistance. Many see this as Greece’s last hope of securing a deal by Sunday from its creditors if it wants to stay in the Eurozone.