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Dollar Climbs Higher As Traders Await Fed's Policy Stance

Dollar Climbs Higher As Traders Await Fed's Policy Stance

The U.S. dollar gained ground against its major rivals on Thursday as traders looked ahead to the Jackson Hole symposium for more insights about the Fed’s plan to scale back bond purchase program.

The Federal Reserve Chairman Jerome Powell is expected to provide some hints on the central bank’s tapering timeline.

Comments from Fed officials at the meeting may impact the outlook for monetary policy following recent indications the central bank plans to begin scaling back asset purchases this year.

Traders also reacted to President of the St. Louis Fed James Bullard’s comments that he is of the view that the central bank should start tapering bond purchases in the fall and finish the process by the first quarter of next financial year. He has also called for a rate hike by end 2022.

Meanwhile, the Kansas City Federal Reserve President George said the Fed should start trimming its monthly bond purchases “sooner rather than later” even though the delta variant poses a risk to the US economic outlook.

First-time claims for U.S. unemployment benefits edged slightly higher in the week ended August 21st, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims inched up to 353,000, an increase of 4,000 from the previous week’s revised level of 349,000.

Economists had expected jobless claims to tick up to 350,000 from the 348,000 originally reported for the previous week.

Meanwhile, a report from the Bureau of Economic Analysis said the US economy advanced an annualized 6.6 percent on quarter in the second quarter, slightly higher than an earlier estimate of 6.5 percent. However, the increase was below the 6.7 percent increase analysts had forecast.

The dollar index climbed to 93.08, gaining nearly 0.3%

Against the Euro, the dollar firmed to $1.1752 from $1.1772.

The Pound Sterling weakened against the dollar, and was fetching $1.3700 a unit a few minutes before the end of the session, compared to $1.3763 Wednesday evening.

The Yen edged down marginally to 110.08 a dollar.

Against the Aussie, the dollar strengthened to 0.7237 from 0.7276.

The Swiss franc slid to 0.9179 a dollar from 0.9138. Data from Swiss Federal Statistical Office showed non-farm payrolls in the country increased by 0.6% year-on-year to 5.126 million in the second quarter of 2021, after a 0.6% decline in the previous three-month period.

The dollar was firm against the Loonie at C$1.2685, compared with the previous close of C$1.2593, as crude oil prices drifted lower on demand worries.

The material has been provided by InstaForex Company – www.instaforex.com