Dollar slides lower after consumer price data
The U.S. dollar trimmed its gains after declined data of consumer price inflation. Consumer price went lower at -0.1%, below the previous month’s figure +0.1% and not meeting the expectation of 0.0%. The slowed data supported growing expectations of the rate hike delay ahead of its Fed announcement on Thursday. But the result that consumer price decrease is caused from the oil price drop and other factors and it can be less likely to influence FOMC meeting and hence limited dollar’s loss.
Investors are attentive to the FOMC result on Thursday with increased uncertainty for Fed to raise rates. Increase in rates would boost the dollar by yield seeking investors.
Japanese yen slightly weakened with ongoing trade deficit
The yen slid on Thursday as the trade data for August showed ¥57 billion deficit. The deficit expanded from fifth straight monthly deficit of ¥54.1 expected. Imports fell 3.1%, further than the expectation of 2.2% drop and exports rose 3.1%, less than 4.0% expected.
NZ dollar slid with expectation of further rate easement
New Zealand dollar went lower after the release of second quarter GDP data with 0.4% increase, a little below the 0.5% expected. The GDP has grown year on year as expected and recent rebound in dairy prices may support further growth but could be limited by drought risks. The expectation has been grown for the Reserve bank of New Zealand to take further easement of the official cash rate. NZD fell 0.29% to its U.S counterpart, traded at 0.6347.
Euro and sterling gains while Eurozone consumer price index stays flat
The Eurozone consumer price was unchanged in August, compared to -0.6% decrease expected. The euro rose 0.28% against greenback, traded at 1.1302. In the U.K, the unemployment rate ticked down to 5.6% better than expected, also the average earnings rose 2.9% after 2.6% increase in July, above +2.5% forecast. The pound gained 1.07% against greenback, traded at 1.5507.
Overall market movements
Overall, the dollar fell 0.26%, the euro gained 0.20%, yen fell 0.11% and the pound rose 0.98%. Emerging currencies and commodity currencies were generally higher ahead of FOMC meeting. Russian ruble gained 2.36%, South African rand by 1.25%, Mexican peso rose 0.68%, Brazilian real up 0.64%, and Turkish lira gained 1.03%. The Australian dollar gained 0.64% and Canadian dollar rose 0.57%.
(Mia Chung)
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