The dollar is turning in a mixed performance Wednesday afternoon, following the release of the minutes of the June Federal Reserve meeting. The buck is down against the Euro, but up in comparison to the British pound and the Japanese Yen.
In a report made somewhat irrelevant by the UK’s shocking Brexit decision, the minutes revealed officials are still leaning toward raising interest rates this year.
“Most participants judged that, in the absence of significant economic or financial shocks, raising the target rate for the federal funds rate would be appropriate if incoming information confirmed that economic growth had picked up, that job gains were continuing at a pace sufficient to sustain progress toward the Committee’s maximum-employment objective, and that inflation was likely to rise to 2% over the medium term,” the minutes of the June 14-15 meeting said.
However, there was no specific guidance offered about the timing of such a rate hike.
Primarily reflecting a jump in the value of imports, the Commerce Department released a report on Wednesday showing that the U.S. trade deficit widened by more than expected in the month of May. The report said the trade deficit widened to $41.1 billion in May from $37.4 billion in April. Economists had expected the deficit to widen to $40.0 billion.
Economic activity in the U.S. service sector grew faster than expected in the month of June, the Institute for Supply Management revealed in a report released on Wednesday. The ISM said its non-manufacturing index jumped to 56.5 in June from 52.9 in May, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 53.3.
The dollar has dropped to around $1.1095 against the Euro Wednesday afternoon, from an early high of $1.1027.
Germany’s factory orders remained unchanged in May, despite an increase in demand from euro area economies. Factory orders stayed flat from April, when they fell by a revised 1.9 percent, the biggest decrease since July 2015, provisional data from Destatis showed Wednesday.
Economists had forecast orders to grow 1 percent after April’s initially reported 2 percent decline.
Germany’s construction activity expanded at the weakest pace in ten months in June, survey figures from Markit Economics showed Wednesday. The construction Purchasing Managers’ Index, or PMI, fell to 50.4 in June from 52.7 in May.
The buck is trading around $1.2920 against the pound sterling Wednesday, just off the 31-year high of $1.2777 set early this morning.
U.K. shop prices declined at a faster pace in June, the British Retail Consortium said Wednesday. Shop prices decreased 2 percent in June from a year ago, which was bigger than May’s 1.8 percent decline.
Britons’ housing equity injections reached its lowest level since early 2008, the Bank of England said Wednesday. Households injected GBP 4.86 billion in the first quarter, compared to GBP 8.19 billion in the prior quarter. This was the lowest since the first quarter of 2008.
The greenback fell to a low of Y100.192 against the Japanese Yen this morning, but has since bounced back to around Y101.300.
The material has been provided by InstaForex Company – www.instaforex.com