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Dollar steadies after Fed holds rates, market focus shifts to PCE
The Fed kept its target range at 3.5% to 3.7%, leaving investors to watch the next Personal Consumption Expenditures and labor data for clues on the September meeting.
The US dollar pared some momentum after the Federal Reserve held its policy rate range at 3.5% to 3.7%, with the Federal Open Market Committee leaving the decision to Chair Kevin Warsh, Yahoo Finance reported. The update said that without forward guidance, attention shifted to upcoming US inflation and labor releases, particularly the Personal Consumption Expenditures report followed by the labor report.
In currency trading, Yahoo Finance said the euro moved higher as investors looked for a European Central Bank stance similar to a “pivot,” noting the ECB held its deposit rate at 2.25%. Traders are also awaiting second quarter Eurozone GDP data and July inflation to gauge whether economic momentum is strengthening.
Sterling was influenced by expectations ahead of next week’s Bank of England meetings, which the report said are most likely to keep current rates unchanged. The piece also pointed to a broader backdrop of mixed inflation, strong wage growth, rising energy costs, and worsening Middle East geopolitical conditions.
On the technical side, Yahoo Finance said the US Dollar Index recovered after a sharp move up from a low near 100.76, moving above a Fibonacci retracement level around 100.94 and toward 101.04. The index was still below key exponential moving averages around 101.20 and 101.10, according to the report.
Latest closeDollar index 99.97 ▼0.8%