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U.S. Dollar Recovers From Post-FOMC Losses Versus Most Majors

The U.S. dollar trimmed its early losses against its most major counterparts in European trading on Thursday, as U.S. treasury yields recovered from losses led by perceived less hawkish Fed monetary policy outlook.

The benchmark treasury yield on the 2-year note rose 1.34 percent, while that of the 10-year equivalent was up by 2.53 percent. Yields move inversely to bond prices.

The Fed on Wednesday lifted benchmark lending rate by a quarter-point to a range of 0.75% to 1% and continued to project two more hikes this year.

The Fed's 'dot plot' of interest-rate projections, released along with the policy statement, showed three hikes in 2017 that was unchanged from its previous forecast in December 2016.

A statement from the Fed said its decision to raise rates came in light of realized and expected labor market conditions and inflation. In her subsequent press conference, Fed Chair Janet Yellen said the message of the rate hike should be that the "economy is doing well".

The greenback was trading in a negative territory in the Asian session.

The greenback recovered to 1.0706 against the euro and 113.54 against the yen, from its early more than a 5-week low of 1.0746 and a new 2-week low of 112.90, respectively. If the greenback extends rise, it may find resistance around 1.06 against the euro and 116.00 against the yen.

The greenback was trading at 1.2253 against the pound, up from an early low of 1.2295. Continuation of the greenback's uptrend may see it challenging resistance around the 1.21 region.

The greenback bounced off to 0.7674 against the aussie, 0.6983 against the kiwi and 1.3321 against the loonie, from its previous lows of 0.7716 and 0.7045 and more than a 2-week low of 1.3276, respectively. The next possible resistance levels for the greenback is seen around 0.75 against the aussie, 0.675 against the kiwi and 1.35 against the loonie.

On the flip side, the greenback resumed its early decline against the franc, falling to near a 4-week low of 0.9978. The next possible support for the greenback is seen around the 0.97 level.

The Swiss National Bank kept its expansionary monetary policy unchanged, as widely expected.

The interest rate on sight deposits at the central bank was kept unchanged at -0.75 percent and the target range for the three-month Libor was retained between -1.25 percent and -0.25 percent, the bank said in a statement.

Looking ahead, the Bank of England will announce its interest rate decision at 8:00 am ET. Economists expect the bank to retain interest rates unchanged at 0.25 percent and asset purchase target at GBP 435 billion.

In the New York session, U.S. housing starts and building permits for February, U.S. weekly jobless claims for the week ended March 11, and U.S. Federal Reserve Bank of Philadelphia's manufacturing index for March are slated for release.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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