The dollar has spiked sharply higher against all of its major competitors Wednesday afternoon, following the release of the highly anticipated announcement from the Fed. The Federal Reserve kept interest rates unchanged on Wednesday amid internal debate about whether to have tightened monetary policy, according to the central bank’s latest policy statement.
Rates have been held at effectively zero since the financial market crash of 2008-2009, but there has been much talk that the Fed would finally hike rates this fall.
Fed Chair Janet Yellen has repeatedly insisted that a rate hike would be “appropriate” this year, but in recent months the global economy has shown signs of strain that may wash ashore here in the U.S.
And with U.S. inflation barely picking up, the Fed is in no real hurry to hike rates ahead of what might be another rough winter.
Still, policy makers signaled that a rate hike is still possible at their ‘next meeting’ in December.
Meanwhile, European Central Bank President Mario Draghi suggested last week that the ECB might expand its own QE plan and China is pursuing its own brand of stimulus.
The dollar has surged to a 2 1/2 month high of $1.0910 against the Euro this afternoon, from an early low of $1.1095.
German consumer confidence is set to weaken for a third straight month in November to its lowest level since early this year as economic expectations deteriorated as the huge influx of migrants raised fears of unemployment.
The forward-looking GfK consumer confidence index for November dropped to 9.4 from 9.6 in October, results of the monthly survey by the GfK showed Wednesday. The score was in line with economists’ expectations. The latest reading was the lowest since February.
Germany’s import prices declined at a faster-than-expected pace in September, figures from Destatis showed Wednesday. The import price index slid 4.0 percent year-over-year in September, exceeding economists’ expectations for a 3.5 percent decrease. In August, prices had fallen 3.1 percent.
French consumer confidence weakened unexpectedly in October, figures from the statistical office INSEE showed Wednesday. The consumer confidence index dropped to 96.0 in October from September’s almost 8-year high of 97.0. Economists had expected the index to remain stable at 97.0.
The buck has jumped to a 2-week high of $1.5255 against the pound sterling, from a low of $1.5347.
England/Wales house price growth accelerated in September to the highest level in six months, figures from Land Registry showed Wednesday. House prices climbed 5.3 percent year-over-year in September, faster than August’s 21-month low of 4.3 percent hike. In July, prices had risen 4.5 percent.
The greenback has risen to Y121.175 against the Japanese Yen this afternoon, from around Y120.400 this morning.
Retail sales in Japan fell 0.2 percent on year in September, the Ministry of Economy, Trade and Industry said on Wednesday. That missed forecasts for an increase of 0.4 percent following the 0.8 percent gain in August.
Confidence among Japan’s small and medium-sized enterprises decreased unexpectedly in October to the weakest level in four months, survey figures released by the Shoko Chukin Bank showed Wednesday.
The small business confidence index fell to 48.7 in October from 49.0 in the previous month. Economists had expected the index to rise slightly to 49.2.
The material has been provided by InstaForex Company – www.instaforex.com