USD Mildly Lower As Fed Dudley Warned Of Strength
ActionForex | Sep 23, 2014 01:55AM ET
The greenback weakened mildly overnight as a Fed dove warned of the strengthen of the currency. New York Fed president William Dudley said that a strong dollar would mean "poorer trade performance, less exports, more imports". And, appreciation of the dollar would "tend to dampen inflation" and make it harder to achieve Fed's mandate. Separately, Minneapolis Fed president Narayana Kocherlakota urged Fed to "sharpen" the statement of its objective. In particular, he noted Fed should be clear on inflation, which is undesirable to be too high and too low. Meanwhile, it's reported that two Fed hawks, Philadelphia Fed president Charles Plosser and Dallas Fed president Richard Fisher will retire next year after completing the terms on FOMC. Overall, dollar is staying in tight range against European majors and yen and maintain near term bullish outlook.
In Eurozone, ECB president Mario Draghi said the central bank is moving to a more "active and controlled management of our balance sheet." He noted that while outright purchases of ABS and covered bonds would increase the size of the balance sheet but "additional risk exposure will be limited". Regarding the economy, he added "the risks surrounding the expected expansion are clearly on the downside." Also he said that the ECB stands ready to use additional unconventional instruments, or alter the size and composition of the current policies when necessary.
Released from China, the flash HSBC PMI manufacturing rose to 50.5 in September, beating expectation of a fall to 50.0. HSBC noted that the activities showed "signs of stabilization" in September and the data point to "modest expansion" in China's manufacturing sector. Nonetheless, the downturn in property markets remains the biggest downside risk to growth.
Looking ahead, Eurozone PMIs will be the main focus in European session. UK BBA mortgage approvals and public sector new borrowing will be featured. Canada will release retail sales and US will release house price index.
Get The News You Want
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.