U.S. Dollar Weakens As Fed Signals Pause On Further Rate Hikes
30 Enero 2019 - 08:39PM
RTTF2
The U.S. dollar lost ground against its major counterparts in
the Asian session on Thursday, after the U.S. Federal Reserve left
interest rates unchanged as expected and indicated that it will be
patient regarding further rate hikes amid a slowing economy.
The Fed voted unanimously to maintain the target range for the
federal funds rate at 2.25 to 2.50 percent.
The accompanying statement included some notable changes from
last month, including dropping a reference to the Fed's plan for
further gradual rate increases.
Instead, the central bank said it "will be patient as it
determines what future adjustments to the target range for the
federal funds rate may be appropriate."
Fed Chairman Jerome Powell noted in his press conference that
the "case for raising rates has weakened somewhat."
Investors also digested data showing that China's manufacturing
activity contracted for a second straight month in January.
The United States and China launched high-level trade talks in
Washington on Wednesday, just two days after the U.S. Justice
Department unveiled a raft of charges against Chinese
telecommunications company Huawei.
The greenback that closed Wednesday's trading at 1.3148 against
the loonie edged down to 1.3123. The next possible support for the
greenback is seen around the 1.30 level.
The greenback declined to near a 2-month low of 0.6924 against
the kiwi and held steady thereafter. The pair closed Wednesday's
trading at 0.6891. If the greenback falls further, 0.72 is possibly
seen as its next support level.
The greenback dropped to 0.7272 against the aussie, down from
yesterday's closing value of 0.7247. The greenback is seen finding
support around the 0.74 level.
The greenback fell to a 2-day low of 0.9922 against the Swiss
franc and moved sideways in later part of the session. The
greenback is poised to challenge support around the 0.97 level.
The greenback reached as low as 1.3137 against the pound,
compared to yesterday's closing quote of 1.3116. On the downside,
1.34 is likely seen as the next support for the greenback.
The U.S. currency slipped to a 2-week low of 108.70 against the
yen, from a high of 109.07 hit at 5:45 pm ET. The greenback is
likely to test support around the 106.00 mark, if it drops
again.
Data from the Ministry of Economy, Trade and Industry showed
that Japan industrial production fell a seasonally adjusted 0.1
percent on month in December.
That exceeded expectations for a decline of 0.5 percent
following the 1.0 percent drop in November.
Having appreciated to 1.1478 against the euro at 5:00 pm ET, the
greenback reversed direction and dropped to near a 3-week low of
1.1509. Next key support for the greenback is possibly seen around
the 1.16 mark.
Looking ahead, German jobless rate for January, Eurozone jobless
rate for December and GDP data for the fourth quarter are scheduled
for release in the European session.
Canada GDP data for November, U.S. weekly jobless claims for the
week ended January 26 and chicago PMI for January are set for
release in the New York session.
Deutsche Bundesbank President Jens Weidmann will speak in
Mannheim at 11:00 am ET.
The Bank of Canada Deputy Governor Carolyn Wilkins will deliver
a speech about the labor market and monetary policy at the Toronto
Region Board of Trade at 12:30 pm ET.
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