Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

FOREX-Dollar treads water before Fed, outlook clues eyed

Published 26/09/2018, 02:55 pm
Updated 26/09/2018, 03:00 pm
© Reuters.  FOREX-Dollar treads water before Fed, outlook clues eyed

© Reuters. FOREX-Dollar treads water before Fed, outlook clues eyed

* Dollar hovers at near 10-week high vs yen

* Aussie, kiwi gain ahead of Fed decision

* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh

By Daniel Leussink

TOKYO, Sept 26 (Reuters) - The dollar kept to tight ranges on Wednesday as investors focused their attention on the Federal Reserve's policy review later in the day as global markets fret over an escalating trade row between the United States and China.

The U.S. currency slipped against the Australian and New Zealand dollars, which were partially underpinned by a survey showing a bounce in New Zealand business sentiment.

Global markets have been on edge in the past few months as the heated Sino-U.S. trade dispute stoked uncertainty about the outlook for global growth and broader monetary policy for some developed and emerging market economies.

The Fed will end its two-day policy meeting later on Wednesday at which it is expected to raise interest rates for the eighth time since late 2015. Investors are also counting on another rate hike before year-end, though the outlook for 2019 is less clear.

Focus will be on the policy outlook and on any comments around the global trade dispute and outlook for growth.

The dollar has benefited from a hawkish rate outlook all year. But in the last few weeks it has lost steam as other economies, such as the euro zone, improved and put them closer to a shift to tighter monetary policy.

The dollar index .DXY , which measures the greenback against six major currencies, has slipped around 3 percent since mid-August.

The index was basically flat at 94.134 on Wednesday, sitting near a 2-1/2 month low of 93.814 touched on Friday.

Minori Uchida, MUFG Bank's chief currency analyst, said appetite for risk has somewhat increased as the total impact of U.S. tariffs on Chinese goods remains relatively small.

The United States imposed fresh tariffs of 10 percent on $200 billion worth of Chinese goods on Monday, which will rise to 25 percent at the end of 2018. long as it remains at that level, the impact won't be so big. U.S. stocks are rising. The risk-on sentiment is the main driver that's weakening the yen," Uchida said.

The Australian dollar AUD=D4 tacked on 0.3 percent to $0.7272.

The New Zealand dollar NZD=D4 advanced 0.4 percent to $0.6674 after a survey showed a surprising bounce in business sentiment in September from a decade low.

Firms' assessment of their own activity also picked up after a tough few months, though they remained pessimistic overall. senior analyst Kumiko Ishikawa said investors were paying attention to talks between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe on the sidelines of the United Nations General Assembly meeting in New York later on Wednesday.

Japan and the United States have reached a broad understanding over how to promote bilateral trade and may announce specifics on Wednesday, Economy Minister Toshimitsu Motegi was quoted as saying after meeting U.S. Trade Representative Robert Lighthizer. said he hoped to give more details after a scheduled summit of the two countries' leaders on Wednesday in New York, Kyodo News reported.

The dollar changed hands at 112.95 Japanese yen JPY= , close to a near 10-week high of 113.02 yen touched earlier in the session.

The euro EUR= , meanwhile, was flat at $1.1767.

European Central Bank Chief Economist Peter Praet said on Tuesday there was nothing new in comments from ECB President Mario Draghi, who had expressed confidence in euro zone inflation and wage growth. pound GBP=D4 was a flinch lower at $1.3181, trading barely changed after rising about half a percent during the previous session.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.