iFOREX | Sep 18, 2013 05:28AM ET
Anticipation over an upcoming Federal Reserve announcement at the conclusion of its two-day meeting kept the U.S. Dollar from strengthening on Tuesday. The greenback was only able to advance versus the Yen for a brief period as investors traded cautiously throughout the day on speculation that the central bank may announce a plan to begin reducing stimulus. Meanwhile, domestic reports showed that Consumer Prices went up, although not as much as predicted. The metrics revealed that Consumer Inflation jumped by a mere 1.5 percent, and Core Inflation inched up by 0.1 percent in the month of August. The greenback traded even weaker than the Swiss Franc and commodity-related currencies like the Australian, New Zealand and Canadian Dollars. Gold prices were impacted by the announcement of CPI metrics. Futures for December delivery traded low during the morning hours of the U.S., showing a drop of 0.2 percent. Economists say that figures denoting Core Consumer Prices climbed at an annualized rate of 1.8 percent will help the Federal Reserve make a clear assessment of existing inflation pressures that could impact the economy.
The Euro traded higher against its U.S. peer subsequent to the release of positive economic reports which showed that the German economy had strengthened. The 17-nation currency benefitted from the release of stellar data and rallied against the British Pound and the Yen. The Euro remained strong as market investors await the conclusion of the Federal Reserve’s policy meeting. The British Pound retreated slightly off previous highs against the greenback as a release confirmed that the Consumer Prices in the U.K. fell in August.
The Yen has traded mixed against the U.S. currency as the Fed decision loomed over the markets, and as Prime Minister Shinzo Abe awaits a feasible government plan that would help balance out an increase in sales tax.
Lastly, in the South Pacific, Australia’s Dollar stopped gaining against the Kiwi after the country’s central bank published the minutes from its September policy meeting, revealing that policy makers are leaving their options open and may in fact cut the costs of borrowing money. The minutes also reflected comments suggesting a devaluation of the monetary unit would help the economy grow. The Aussie traded steady against the greenback but rallied later on as investors shifted their focus to the Federal Reserve’s two-day meeting. New Zealand’s Dollar traded steadily against the U.S. monetary unit ahead of an announcement on the Fed’s decision.
EUR/USD- Sentiment Improved
The Euro traded higher against the greenback and sustained a second day of gains after reports showed that the ZEW Index which measures economic sentiment in Germany went up from 42.0 to 49.6 this month, as the outlook for the Euro region’s economy improved. The ZEW Index which measures economic confidence in the Euro monetary bloc surged from 44.0 in August to 58.6 this month as well.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.