Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar Edges Off Highs Ahead of Release of Fed Minutes

Forex Aug 18, 2021 03:02AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Peter Nurse

Investing.com - The dollar edged lower in Europe Wednesday, but remained at elevated levels with global growth concerns, caused by the ongoing Covid outbreak, prompting traders to cut back on their positions with riskier currencies.

At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 93.093, just below the one-week high it hit on Tuesday.

USD/JPY edged higher to 109.59, EUR/USD was 0.1% higher at 1.1719, after falling to 1.1702 in the Asia session, its lowest since November 2020, while GBP/USD was largely unchanged at 1.3744, despite U.K. inflation slowing more sharply than expected to 2.0%, the Bank of England’s target, in July.

The dip in U.K. inflation is likely to be temporary, analysts said, pointing to sharp rises in household energy bills this year and sustained pressure on supply chains. "There’s little doubt that headline CPI will go well above 3% later this year," said ING economist James Smith in a note to clients. "It’s not difficult to see inflation coming fairly near to the Bank of England’s forecast of 4% in around November."

U.S. retail sales dropped 1.1% in July, a lot more than the 0.3% decline expected, according to data released Tuesday. This added to the disappointing growth numbers from China earlier in the week, causing traders to question the global growth profile as many countries struggle to deal with its latest Covid-19 outbreak.

Although a lot of the focus has been on the recent rise in coronavirus cases in China, the U.S. recorded more than 1,000 Covid-19 deaths on Tuesday, according to Reuters data, with the areas that have low vaccination rates particularly hard hit.

Investors are now looking to the minutes from the U.S. Federal Reserve’s latest meeting, due to be released later in the day, for clues to the central bank’s timeline for asset tapering and interest rate hikes. 

The Fed will also hold its Jackson Hole symposium in the following week, which could also provide more clues, especially as many market participants expect the central bank to announce plans to ease off bond buying at either its September or November policy meeting.

Elsewhere, NZD/USD traded flat at 0.6924 after volatile trading overnight in the wake of the Reserve Bank of New Zealand’s decision to keep interest rates unchanged, instead of raising them for the first time since 2014, as widely expected.

The pair initially fell to a nine-month low at 0.6868, but it soon recovered after the central bank explained that it largely held off on raising rates because of the snap Covid-induced lockdown in the country and hikes were still to be expected in the near future.

 

Dollar Edges Off Highs Ahead of Release of Fed Minutes
 

Related Articles

Dollar struggles to regain inflation-induced losses
Dollar struggles to regain inflation-induced losses By Reuters - Aug 11, 2022 1

By Alun John HONG KONG (Reuters) - The euro and Japanese yen held onto most of their overnight gains on Thursday, having been boosted by U.S. inflation data coming in less hot...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email