The dollar was up modestly against its major competitors Wednesday, adding to the gains of the previous sessions. The Federal Reserve has released the minutes of its most recent policy meeting, which has caused the U.S. currency to ease back a bit from its intraday highs.
Only a “few” Federal Reserve members anticipate raising interest rates in June, according to the minutes of the Federal Reserve’s April 29-30 meeting.
Back in March, “several” members said the Fed was on track to raise rates in June, but policy makers appear more reluctant to tighten given the fragile nature of the economic recovery.
April’s dismal retail sales report came out days after the meeting and was therefore not factored in, meaning the Fed is even less likely to seriously consider a summertime rate hike than these minutes would indicate.
Fed members say they will be keeping a close eye on incoming economic data.
There were no U.S. economic reports released today. However, several reports are scheduled to be released over the next two sessions. Existing home sales and weekly jobless claims are slated to be released tomorrow, while the consumer price index is scheduled to be released on Friday.
The European Central Bank’s Governing Council is meeting today to discuss whether to raise the collateral requirements for the emergency loans it gives to the Bank of Greece.
The 25-member council, led by ECB President Mario Draghi, is set to meet in Frankfurt to decide whether to tighten the rules for the Emergency Liquidity Assistance, or ELA, for Greece.
However, analysts expect ECB policymakers not to any take decision that could trigger a crisis. That said, pressure is mounting on the bank to get tough with Greece as the country veers towards a default amid the ongoing political crisis.
The dollar climbed to a 2-week high of $1.1061 against the Euro Wednesday morning, but has since slipped back to around $1.1125.
Eurozone construction output increased in March, after declining in the previous month, data from Eurostat showed Wednesday. Construction output rose 0.8 percent month-over-month in March, reversing a 1.6 percent decrease in February, which was revised from a 1.8 percent drop reported earlier.
Germany’s producer prices declined at a slightly faster-than-expected pace in April, figures from Destatis showed Wednesday. The producer price index fell 1.5 percent year-over-year in April, just above economists’ expectations for a 1.4 percent decrease.
Bank of England policymakers unanimously voted to keep the monetary policy stance unchanged at the meeting held early this month and suggested that next action would be a hike in interest rate, but such a move is unlikely until 2016.
The Monetary Policy Committee voted 9-0 to hold the key interest rate at a record low of 0.50 percent and asset purchase programme at GBP 375 billion, the minutes of the meeting held on May 7 and 8 showed Wednesday.
For two members, the immediate policy decision remained finely balanced between voting to hold or raise the bank rate.
“While there was a range of views over the most likely future path for Bank Rate, all members agreed that it was more likely than not that Bank Rate would rise over the three-year forecast period,” the minutes said.
The buck traded around $1.5465 against the pound sterling Wednesday morning, which was slightly off of yesterday’s intraday high. The U.S. currency has pulled back to around $1.5540 this afternoon.
UK households’ finance outlook worsened for the first time in eight months in May, while their financial woes eased to a record low, results of a survey by Markit Economics and financial information provider Ipsos Mori revealed Wednesday. The seasonally adjusted Markit Household Finance Index rose slightly to 45.8 in May from 45.7 in the previous month.
The greenback broke out to a 2-month high of Y121.474 against the Japanese Yen Wednesday, but has since retreated to around Y121.140.
Japan’s gross domestic product climbed 0.6 percent on quarter in the first quarter of 2015, the Cabinet Office said in Wednesday’s preliminary reading. That topped expectations for an increase of 0.4 percent, and it was up from the downwardly revised 0.3 percent rate of growth in the fourth quarter.
The leading index for Japan, which measures future economic activity, increased more than initially estimated in March, final figures from Cabinet Office showed Wednesday. The leading index rose to 106.0 in March, revised from the preliminary estimate of 105.5. The score for February was 105.3.
The material has been provided by InstaForex Company – www.instaforex.com