Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Forex - Dollar Climbs; Fed Minutes Offer Downbeat Outlook

ForexMay 21, 2020 02:39AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Peter Nurse - The U.S. dollar posted gains in early European trade Thursday, as investors digested the latest downbeat comments from the Federal Reserve, while Asian data offered no real recovery clues.

At 2:45 AM ET (0645 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 99.403, up 0.3%, EUR/USD dropped 0.1% to 1.0962, while USD/JPY rose 0.2% to 107.76.

Earlier Thursday, a trade report from South Korea, a bellwether for global commerce, showed exports may be set to drop more than 20% in May for a second month. Meanwhile, Japan’s overseas shipments also plunged by more than a fifth in April and a purchasing managers index showed manufacturing activity weakening further in May.

Adding to this, Federal Reserve members said the impact of the coronavirus would "weigh heavily on growth in the near term, and posed considerable downside risks to the economic outlook over the medium term," according to the minutes of their April meeting out Wednesday.

An air of positivity had returned to the market as countries started to reopen their economies, but the wary nature of these comments coupled with the disappointing data served to hit risk appetite, sending buyers back to the safe haven U.S. dollar.

Attention will now turn to the release of the key weekly U.S. jobless claims figures, at 8:30 AM ET (12:30 GMT), with economists looking for a dip from last week, but a slight one as companies are still forced to shed jobs.

Claims for first-time unemployment benefits are expected to come in at 2.4 million, compared with nearly 3 million the week before.

Elsewhere, sterling has continued to weaken, weighed by apparent difficulties in Brexit trade negotiations with the EU as well as the prospect of negative interest rates given the likely depth of the economic slowdown ahead.

U.K. Chancellor Rishi Sunak warned earlier this week that the country faced a “severe recession, the likes of which we haven't seen.”

And that was before the country’s inflation rate fell to 0.8% in April, its lowest since August 2016.

”[The data] keeps the debate about negative rates alive and kicking,” Kit Juckes, macro strategist at Societe Generale, told CNBC.

At 02:45 AM ET, GBP/USD traded 0.4% lower at 1.2193.

Elsewhere, central banks in Turkey and South Africa are both scheduled to hold policy meetings later Thursday and both are expected to cut rates again despite the heavy losses their currencies have recently endured.

Analyst polls predict South Africa will cut its 4.25% main rate by another 50 basis points, while Turkey’s central bank will likely cut another 50-100 basis points off its 8.75% repo rate.

At 02:45 AM ET, USD/TRY traded flat at 6.7888 and USD/ZAR up 0.6% at 18.0291.


Forex - Dollar Climbs; Fed Minutes Offer Downbeat Outlook

Related Articles

Dollar extends gains on Fed boost
Dollar extends gains on Fed boost By Reuters - Jun 17, 2021 2

By Saqib Iqbal Ahmed and Elizabeth Howcroft NEW YORK (Reuters) - The dollar extended its gains against a basket of currencies on Thursday, a day after the U.S. Federal Reserve...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with 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
  • 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.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. 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’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
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?
Replace the attached chart with a new chart ?
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'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
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email