The U.S. Dollar Index remained close to a 2-week peak following the Federal Reserve Bank’s interest rate and policy decisions which were largely anticipated by market players and analysts. The Fed maintained its existing policy, saying that it would continue with the monthly asset purchases of $85 billion but the tone of the announcement suggested that the policy makers weren’t as bothered by the possible state of the American economy as earlier expected. Analysts point out that the market players continue to be very comfortable shorting the dollar, given the outlook.
As reported at 12:54 p.m. (JST) in Tokyo, the U.S. Dollar Index was trading at 79.704 .DXY, still within striking distance of yesterday’s 2-week high of 79.905. DXY; though the Index is still some 0.7% lower for the month it is moving well away from last week’s 9-month low of 78.998 .DXY. The EUR/USD pair slipped from Wednesday’s peak of $1.3787 and was trading recently at $1.3735, with bearish traders hopeful that the pair will break a key pivot price range of $1.3645 to $1.3655 and further extend the common currency’s fall. The USD/JPY pair traded at 98.40 Yen, easing off by 0.1% from Wednesday’s peak of 987.69 Yen.
PMI and Jobless Claims Data Looms
Market players will now resume their watch of U.S. economic data points for reinforcement of short dollar positions, with the release later today of new jobless benefit claims and PMI data from Chicago. A consensus of analysts expects to see the labor data improve for the week with a drop to 339K new claims from 350K last week, and the PMI reading to ease back slightly from 55.7 to 55.0.