The dollar climbed against most major peers even despite the Federal Reserve has pushed back expectations for the timing of the central bank’s first interest rate increase. It has been more important the statement from the Federal Open Market Committee saying that „economy activity has been expanding in a solid pace. Labor market conditions have improved further, with strong job gains and a lower unemployment rate”. Still, most of the analysts have the Fed’s October meeting as the most probably date for the first interest rates hike since December 2008. The U.S. dollar appreciated 0.8% to $1.1287 per euro, after weakening 1.3% the previous day. The peer reached $1.1098 last Monday, the strongest since September 2003. The yen appreciated 0.3% to 117.54 per dollar and also rose 1.1% to 133.68 per euro. The New Zealand dollar extended losses after the Reserve Bank held rates at 3.5%, saying the nation’s currency remained unjustifiably and unsustainably high. The NZD slid 1.8% to 73.17 U.S cents and touched a more than three years low. Regarding the Australian dollar, even though it raised as much as 1.1% in the earlier trade, encouraged by good economic data released (consumer price index rose 0.7% in the fourth quarter from the previous three month period, exceeding estimates) the Australian’s currency finally slid 0.6% to 78.89 U.S. cents. The Singapore dollar weakened against most of its major peers after its Monetary Authority, which uses the currency as the main policy tool, decided to ease policy to combat growing risks of deflation. Singapore’s currency dropped 1.1% against U.S. dollar, touching the weakest level since August 2010.
Read the full report: FX Daily