After climbing higher early on in the day, the U.S. dollar pared some gains on Wednesday after New York Fed Bank President John Williams said the labor market has to see more progress to get closer to the central bank’s maximum employment goal.
In the Beige Book released today, the Fed said the U.S. economy “downshifted slightly” in August due to the surge in coronavirus cases.
The dollar index, which climbed to 92.86 by late morning, dropped to 92.61 a little past noon, and is currently hovering around 92.70, up 0.21% from the previous close.
Against the Euro, the dollar firmed to $1.803 before giving up some gains. It is currently trading at $1.1818, up more than 0.2% from Tuesday’s close. Markets await monetary policy decision from the European Central Bank for more hints on tapering of emergency stimulus measures.
European Central Bank policymaker Robert Holzmann told Eurofi Magazine that the central bank is likely to normalize monetary policy quicker than market expectations amid rising inflationary risks.
The Pound Sterling is fetching $1.3773 a unit, marginally down from the previous close of $1.3785.
The Yen is little changed at 110.26. Japan’s gross domestic product was up 1.9 percent on year in the second quarter of 2021, the Cabinet Office said. That exceeded expectations for an increase of 1.6 percent following the 3.7 percent contraction in the previous three months.
Against the Aussie, the dollar has firmed to 0.7366 from 0.7386.
The Swiss franc has weakened to 0.9221 a dollar from 0.9155.
The Loonie has slid to 1.2694 against the dollar, easing from 1.2649. The Bank of Canada left its interest rate and the size of its quantitative easing program unchanged and pledged to hold the policy rate at the effective lower bound until inflation target is met.
The central bank noted that the Canadian economy still has considerable excess capacity and the recovery continues to require extraordinary monetary policy support.
The material has been provided by InstaForex Company – www.instaforex.com