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Forex - Dollar higher vs. most rivals on Fed pledge, SNB action

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Forexpros - The U.S. dollar was higher against most of its major counterparts on Wednesday, after the Federal Reserve pledged to keep rates at ultra-low levels "at least" through mid-2013, while the Swiss franc weakened after the Swiss National Bank took further measures to stem the currency's strength.

During European morning trade, the greenback was up against the euro, with EUR/USD shedding 0.12% to hit 1.4357.

Earlier in the day, government data showed that German consumer price inflation rose 0.4% in July, unchanged from a previous estimate and broadly in line with expectations.

The greenback was also higher against the pound, with GBP/USD slumping 0.45% to hit 1.6242 ahead of the Bank of England's quarterly inflation report due out later in the day. The report was to be followed by a press conference by BOE Governor Mervyn King.

Meanwhile, the greenback erased losses against the Swiss franc after the Swiss National Bank announced further measures to weaken the currency, including increasing liquidity to the money market and conducting foreign exchange swap transactions. USD/CHF rose 0.22% to hit 0.7229 following the news.

Elsewhere, the greenback fell to pre-intervention levels against the yen, with USD/JPY slumping 0.38% to hit 76.67, prompting Japanese Finance Minister Yoshihiko Noda to say that he would continue to closely watch movements in currency markets.

The greenback was higher against the risk-sensitive Canadian, Australian and New Zealand dollars, with USD/CAD jumping 0.78% to hit 0.9849, AUD/USD shedding 0.16% to hit 1.0339 and NZD/USD slipping 0.28% to hit 0.8351.

Official data published earlier showed that China's trade surplus widened to USD31.5 billion in July, the highest level in more than two years. Analysts had expected China's trade surplus to widen to USD27.4 billion.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.13% to hit 74.13.

The Federal Reserve pledged on Tuesday to keep its benchmark interest rate at an all-time low, adding that it will maintain a loose monetary policy until "at least through mid-2013."

The Fed also indicated that it "discussed the range of policy tools available to promote a strong economic outlook recovery in a context of price stability" and said it was prepared to employ the tools "as appropriate".

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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