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Forex - Dollar index holds steady ahead of Fed meeting minutes

Published 08/16/2017, 05:16 AM
Updated 08/16/2017, 05:16 AM
Dollar little changed vs. rivals with FOMC meeting minutes on tap

Dollar little changed vs. rivals with FOMC meeting minutes on tap

Investing.com - The dollar remained broadly higher against the other major currencies on Wednesday, as tensions between the U.S. and North Korea continued to ease and as markets were eyeing the release of U.S. data later in the day.

The greenback strengthened broadly after data on Tuesday showed that U.S. retail sales rose at a faster than expected rate in July.

A separate report showed that the Empire State manufacturing index climbed to 25.20 in August from 9.80 the previous month, blowing past expectations for a reading of 10.00. It was the highest level since September 2014.

Market participants were looking ahead to U.S. reports on building permits and housing starts, due later in the day, as well as the minutes of the Fed’s most recent policy meeting for indications on another potential rate hike this year.

EUR/USD was little changed at 1.1732. The euro initially dropped following reports European Central Bank President Mario Draghi will not deliver any fresh monetary policy message at the U.S. Federal Reserve's Jackson Hole conference.

The report tempered expectations that the ECB is moving closer to announcing plans to scale back its monetary stimulus program.

But sentiment on the single currency improved after preliminary data showed that the euro zone economy grew at a faster rate that expected in the second quarter.

The pound moved higher, with GBP/USD up 0.19% at 1.2895, off a one-month trough of 1.2843 hit overnight.

Demand for sterling was boosted after official data earlier showed that the U.K. jobless rate unexpectedly dropped in June while wage inflation registered a stronger-than-expected increase

Elsewhere, USD/JPY rose 0.24% to 110.92, the highest since August 4, while USD/CHF held steady at 0.9732.

Demand for the safe-haven assets continued to weaken since North Korea said on Tuesday it had delayed a decision on a plan to fire missiles at the U.S. Pacific territory of Guam while it watches U.S. actions a little longer.

The Australian and New Zealand dollars were stronger, with AUD/USD up 0.49% at 0.7860 and with NZD/USD adding 0.17% to 0.7250.

Meanwhile, USD/CAD slipped 0.16% to trade at 1.2737, just off Tuesday’s one-month peak of 1.2778.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 93.77, close to Tuesday’s three-week high of 94.04.

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