Dollar mixed on U.S. data, Fed rate hike expectations

Written By Unknown on Jumat, 19 September 2014 | 08.10

Investing.com - Investing.com - The dollar traded mixed to lower against most major currencies on Thursday, buoyed by expectations for tighter monetary policy on the horizon and softened by a mixed bag of U.S. data.

In U.S. trading on Thursday, EUR/USD was up 0.47% at 1.2920.

The Federal Reserve on Wednesday said that it will likely close its monthly bond-buying program in October and suggested it will raise interest rates in 2015.

The Fed added interest rates will hover just above zero for a "considerable time" after it closes its easing program, but the U.S. central bank also suggested it could begin hiking benchmark borrowing costs faster than anticipated once it decides to start tightening policy.

An end of stimulus and prospects for higher interest rates should give the dollar added support going forward, though mixed U.S. data allowed for profit taking on Thursday.

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Sept. 13 fell by 36,000 to 280,000, the lowest level since mid-July, from the previous week's revised total of 316,000.

Analysts had expected jobless claims to fall by 11,000 to 305,000 last week.

Separately, the U.S. Commerce Department said that the number of building permits issued last month dropped by 5.6% to 998,000 units from July's total of 1.057 million.

Analysts expected building permits to fall by 0.4% to 1.045 million units in August.

The report also showed that U.S. housing starts tumbled by 14.4% last month to hit 956,000 units from July's total of 1.117 million units, confounding expectations for an increase to 1.040 million.

The dollar was up against the yen, with USD/JPY up 0.38% at 108.77, and down against the Swiss franc, with USD/CHF down 0.74% at 0.9342.

The greenback was down against the pound, with GBP/USD up 0.61% at 1.6376.

Scots were flocking to the polls on Thursday to vote on their independence in a referendum, with investors taking up positions betting that voters will decide to remain part of the U.K.

The pound firmed earlier after the final Ipsos Mori opinion poll of the referendum campaign showed the no vote was slightly ahead at 53%, while support for the yes vote was at 47%.

Past polls found the yes and no camps trading places at 51% versus 49%, and the latest survey suggested the no campaign was advancing.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.45% at 1.0954, AUD/USD up 0.30% at 0.8983 and NZD/USD up 0.57% at 0.8143.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.38% at 84.43.

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