Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

US Dollar slips as optimism holds ahead of Fed

Forex Apr 29, 2020 11:05
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. A man displays US dollar notes after withdrawing cash from a bank in Harare 2/2

By Tom Westbrook

SINGAPORE (Reuters) - The dollar was on the back foot on Wednesday as the slowing spread of the coronavirus and moves to re-open economies supported the investor mood, ahead of major central bank meetings.

The risk-sensitive Australia dollar rose 0.4% to $0.6517 to track toward a sixth straight session of gains, and the currency's best month in four years. The New Zealand dollar rose 0.6% to $0.6093, its highest in a week. [AUD/]

But gains were capped by caution and other majors steady as markets look to the U.S. Federal Reserve, which meets on Wednesday, and the European Central Bank, which meets on Thursday, for guidance.

Investors will be watching to see if the U.S. central bank gives any clues on its future policy path after it responded to the economic devastation of the COVID-19 pandemic by slashing rates, buying bonds and backstopping credit markets.

"There's no expectation the Fed will change policy," said Joe Capurso, FX analyst at the Commonwealth Bank of Australia (OTC:CMWAY) in February.

"The market will definitely be very keen on knowing what the (economic forecast) numbers are, or at least qualitatively how deep and how long this might go on."

The Fed is due to issue a statement at 1800 GMT, followed by a press conference with chairman Jerome Powell at 1830 GMT.

The U.S. dollar was steady against a basket of currencies at 99.837 (=USD), and slipped a fraction against the rangebound euro, yen and pound.

The dollar sat near a six-week low against the yen at 106.70 yen per dollar. A pound bought $1.2441 and a euro (EUR=) $1.0835.

Cases of COVID-19, the respiratory illness caused by the virus, topped 1 million in the United States overnight but investor focus is now increasingly on plans to relax restrictions and restore a battered economy.

U.S. consumer confidence slumped to a six-year low this month, data showed overnight. Markets are bracing for quarterly GDP, published at 1230 GMT, which is expected to show a 4% contraction.

Despite the gloom, markets have almost solely focused on the positives over the past week, as seen in the performance of the Australian dollar, a risk-sensitive currency.

As Spain, France, New Zealand, Australia, Italy and Canada move cautiously toward reopening their economies, the Aussie has soared - rising some 6% on the month and 18% from March's 17-year low.

"This is quite extraordinary," said National Australia Bank (OTC:NABZY)'s head of FX strategy, Ray Attrill.

"It didn't underperform the G10 pack by nearly as much in March, and does leave us a little cautious about the near-term outlook," he said.

The bank revised up its year-end forecast for the Aussie to $0.6750, but expects it to fall to $0.6200 at the end of the current quarter.

US Dollar slips as optimism holds ahead of Fed
 

Related Articles

Dollar Edges Higher; Sterling Weak After GDP Fall
Dollar Edges Higher; Sterling Weak After GDP Fall By Investing.com - Aug 12, 2022

By Peter Nurse Investing.com - The U.S. dollar edged higher in early European trade Friday, rebounding to a degree after a two-day selloff as weaker than expected inflation data...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email