Investors are anxiously waiting for the minutes from the April 29-30 meeting of the Federal Open Market Committee which will be released today to determine the future of the U.S. economy. As a result, the U.S. Dollar traded in narrow limits against major currencies. The U.S. Dollar continues to come under pressure against the Euro as investors now believe that the ECB will not cut interest rates in the near future. The Dollar also fell sharply against the Yen, as investors are concerned about the increasing oil prices which rose to a record high of $129 per barrel. According to analysts the U.S. Dollar will be greatly influenced by the information outlined in the minutes of the FOMC.
On May 21, 2008, at 10:15 am (00:15 GMT) the U.S. Dollar traded at 103.53 Yen, compared to 103.68 Yen, while the Euro traded at $1.5657 compared to $1.5650 in late trading in New York yesterday. The Euro surged through the $1.5600 level in New York trading as investors’ expectations of interest rate cuts in the single currency zone were pared after the release of the Producer Prices data for Germany which shows that the producer price surged by 1.1% in April.
Some experts are predicting that the European Central Bank will increase interest rates soon, even in inflation remains high and the economy slows down.