Kantox currency update: US dollar bounces up after Fed’s statement
The dollar appreciated against its main rivals on Thursday, pushing the euro and the pound sterling off recent highs, as the Federal Reserve confirmed its gradual tightening plan in its last monetary policy meeting.
The Fed left its benchmark rate unchanged at 2.25% as widely expected, but maintained its positive economic outlook and paved the way for another interest rate hike in December, that would be the fourth of this year.
EUR/USD pulls back below 1.1400. The euro lost ground on Thursday, with the dollar strengthening across the board after the hawkish Fed monetary policy statement, and extended its reversal from week highs at 1.1500 to 1.1335 area s far. As at London market opening times, the EUR/USD is trading at 1.1340.
GBP/USD retreats to 1.3000 area. The pound followed the EUR/USD and pulled back against the dollar after the Fed’s meeting, retreating from three-week highs at 1.3175 to return to give away the previous three days’ gains and returning to levels near 1.3000. As at London market opening times, the GBP/USD is trading at 1.3015.
USD/JPY hits one-month highs at 114.00. The US dollar appreciated on Thursday for the fifth consecutive day, fuelled by the monetary policy differential between the Fed and the BOJ, to reach fresh one-month highs at 114.05, before ticking down on early Friday’s trading. As at London market opening times, the USD/JPY is trading at 113.85.
In the Calendar Today
Today will be a busy day in the UK calendar, with the releases of a string of economic indicators:
National Statistics will release September’s industrial and manufacturing production figures, which tend to have a moderate impact on the pound.
The most interesting event, however, will be the preliminary third quarter’s UK Gross Domestic Product reading. The market consensus points out to a significant economic acceleration, which might improve optimism about UK economy and give a fresh boost to the GBP.
09:30GMT GBP: Manufacturing Production (MoM) (Sep)
Previous: -0.2% Expected: 0.1%
09:30 GMT GBP: Industrial Production (MoM) (Sep)
Previous: 0.1% Expected: 0.2%
09:30 GMT GBP: Gross Domestic Product (YoY) (Q3)
Previous: 1.2% Expected: 1.5%