The U.S. dollar stayed above the unchanged line right through the session on Wednesday. The greenback’s display of strength was due largely to its safe-haven appeal amid uncertainty about the virus pandemic infection easing anytime soon.
The currency market was also reacting to the minutes of the Federal Reserve’s latest policy meeting.
The dollar index, which was up sharply at 99.90 in the Asian session, later dropped to around 99.90 before recovering to 100.20, gaining about 0.3% over previous close.
Against the Euro, the dollar firmed up to $1.0831 before paring some gains and dropping to $1.0853, still holding in positive territory, notching up nearly 0.4%.
The Euro eased as Eurozone finance ministers failed to resolve impasse and agree on a package of measures to cushion the economic fallout from the coronavirus outbreak. Disappointing reports about growth outlook for Germany and France weighed as well on the euro.
Against Pound Sterling, the dollar was down by about 0.3% at $1.2378.
The Japanese Yen was weaker marginally at 108.87 a dollar, compared with 108.75 yen a dollar Tuesday evening.
The dollar was stronger against Swiss franc with a unit fetching 0.9723 franc.
Against the Aussie, it was down nearly 1% with the pair trading at 0.6228, while against the Loonie, it was gaining about 0.3% at C$1.4031.
a report from Canada Mortgage and Housing Corporation (CMHC) showed the seasonally adjusted annual rates of housing starts in Canada fell 7.3% from a month earlier to 195,174 units in March 2020. However, it was well above market forecasts of 180,000 units.
Meanwhile, the value of building permits in Canada dropped 7.3% from a month earlier to C$ 8.6 billion in February 2020, following a downwardly revised 3.3% increase in January. The value of residential permits dropped 7.3% to C$ 5.3 billion in February, from a month earlier.
Minutes from the Federal Reserve’s emergency monetary policy meetings in March showed a few participants preferred a smaller interest rate cut to slashing rates by a full percentage point at the March 15th meeting.
The minutes said some meeting participants favored cutting rates by 50 basis points, noting that such a decision would provide support to the economy in the face of coronavirus outbreak while preserving the Fed’s ability to lower rates again in the event the economic outlook deteriorated further.
The participants also noted that cutting rates by 100 basis points less than two weeks after an emergency 50 basis point cut ran the risk of sending an overly negative signal about the economic outlook.
The material has been provided by InstaForex Company – www.instaforex.com