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Forex - Dollar eases but still close to 2-1/2 month highs after Fed

Published 29/10/2015, 08:09 pm
Updated 29/10/2015, 08:14 pm
© Reuters.  Dollar slips lower before US GDP data, but Fed statement limits losses

© Reuters. Dollar slips lower before US GDP data, but Fed statement limits losses

Investing.com - The dollar eased against the other major currencies on Thursday, but remained close to two-and-a-half month highs after the Federal Reserve indicated that it may raise U.S. interest rates at its next meeting in December.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased to 97.52, not far from Wednesday’s highs of 97.89.

The dollar strengthened across the board after Wednesday’s Fed statement specifically said that officials might make a decision to act on rates their December meeting.

The Fed statement also downplayed concerns over recent turmoil in global financial markets.

The central bank kept rates on hold at its September meeting amid fears that a China-led slowdown in global growth could affect the U.S. economy.

The Fed statement highlighted the diverging monetary policy expectations between the U.S. and central banks in the rest of the world.

The dollar gave up some gains as investors looked ahead to preliminary data on U.S. third quarter growth later in the session.

The GDP report was expected to show that growth slowed to around 1.7% in the three months to September from 3.9% in the second quarter.

EUR/USD was up 0.18% to 1.0945, pulling back from Wednesday’s lows of 1.0896, the weakest since August 7.

The yen gained ground, with USD/JPY down 0.33% to 120.69 after upbeat data on Japanese industrial production was seen as reducing the chances for further monetary easing by the Bank of Japan at its upcoming meeting on Friday.

The dollar was little changed against sterling, with USD/GBP at 1.5267.

Meanwhile, the New Zealand dollar backed off session lows after the Reserve Bank left rates on hold overnight, with NZD/USD at 0.6674, after falling as low as 0.6648 earlier.

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