Forex - Dollar slips lower before Federal Reserve decision
Investing.com
Published Sep 17, 2015 11:15AM ET
Dollar slips lower before key Fed announcment
Investing.com - The dollar slid lower against the other major currencies on Thursday, as investors waited to see whether the Federal Reserve would raise short-term interest rates for the first time in nearly a decade.
EUR/USD was last up 0.16% to 1.1310 from 1.1288 late Wednesday.
The dollar remained under pressure ahead of the conclusion of the Fed policy setting meeting later in the day amid uncertainty over whether the central bank would end its policy of holding interest rates close to zero.
An increase in interest rates would boost the greenback by making it more attractive to yield-seeking investors.
Earlier Thursday U.S. data showed that the number of people who filed for unemployment assistance fell to a two-month low last week, remaining in territory consistent with a strengthening labor market.
The Labor Department said the number of individuals filing for initial jobless benefits fell by 11,000 to 264,000 from the previous week’s total of 275,000.
At the same time data showed that the number of new U.S. housing starts fell by 3% in August, but the number of building permits increased by 3.5%, indicating that the housing market remains robust.
A separate report showed that manufacturing activity in the Philadelphia region fell into contraction territory this month, with the first negative reading since February 2014.
The reports came one day after data showing that U.S. inflation unexpectedly fell for the first time in seven months in August tempered expectations for a rate hike.
Fed Chair Janet Yellen has said that an interest rate increase is data dependent but has also indicated that she expects to begin raising rates before the end of the year.
The dollar held gains against the yen, with USD/JPY up 0.29% to 120.90 compared to 120.55 late Wednesday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.16% to 95.37.
The greenback was weaker against the pound and the Swiss franc, with GBP/USD up 0.15% to 1.5515 and USD/CHF slipping 0.14% to 0.9698.
The Swiss franc rose to session highs earlier Thursday after the Swiss National Bank kept interest rates unchanged at record lows and said the Swiss franc was still “significantly overvalued.”
Meanwhile, the commodity linked currencies were broadly lower, with AUD/USD down 0.71% to 0.7147, NZD/USD losing 0.68% to trade at 0.6322 and USD/CAD at 1.3181.
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Written By: Investing.com
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