Dollar Dropping On Powell Comments
28 Noviembre 2018 - 07:59AM
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The dollar has turned sharply lower against its major rivals
Wednesday afternoon as traders react to comments from Federal
Reserve Chairman Jerome Powell. In a highly anticipated speech
before the Economic Club of New York, Federal Powell described the
current level of interest rates as "just below" neutral following a
series of rate hikes this year.
Powell noted the Fed began gradually raising interest rates from
near-zero levels about three years ago as the economy improved.
The Fed has raised three times in 2018 to a range of 2 to 2.25
percent and has forecast another rate hike before the end of the
year.
"Interest rates are still low by historical standards, and they
remain just below the broad range of estimates of the level that
would be neutral for the economy--that is, neither speeding up nor
slowing down growth," Powell said.
The latest remarks seem to conflict with comments Powell made
early last month, when he said rates were a "long way from
neutral."
Economic growth in the U.S. was unrevised in the third quarter,
according to the second reading released by the Commerce Department
on Wednesday. The report said real gross domestic product jumped by
3.5 percent in the third quarter, unrevised from the initial
estimate and in line with economist estimates.
New home sales in the U.S. showed a substantial decrease from an
upwardly revised level in the month of October, according to a
report released by the Commerce Department on Wednesday. The
Commerce Department said new home sales plummeted by 8.9 percent to
an annual rate of 533,000 in October from an upwardly revised rate
of 597,000 in September.
Economists had expected new home sales to rise to a rate of
575,000 from the 553,000 originally reported for the previous
month.
The dollar has dropped to a 2-day low of $1.1385 against the
Euro Wednesday afternoon, from a high of $1.1267.
Germany's consumer confidence is set to slightly weaken at the
end of the year as high inflation rates and global economic
uncertainty weigh on households' sentiment, survey results from the
GfK showed on Wednesday.
The forward-looking consumer confidence indicator is set to drop
to 10.4 from 10.6 in November, the Nuremberg-based GfK said in its
latest report. Economists had forecast a reading of 10.5.
The buck has fallen to $1.2850 against the pound sterling this
afternoon, from an early high of $1.2732.
The greenback has pulled back from a 2-week high of Y114.036 to
around Y113.500 this afternoon.
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