By Peter Nurse
Investing.com – The dollar weakened in early European trading Thursday, falling to two-week lows after further indications that U.S. interest rate hikes are still a distant event following the conclusion of the latest Federal Reserve meeting.
At 2:55 AM ET (0755 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% lower at 92.157, just higher than the two-week low of 92.097 reached earlier Thursday.
fell 0.1% to 109.78, rose 0.2% to 1.3931, climbing to a one-month high, rose 0.1% to 1.1856 ahead of German data on inflation and unemployment, while the risk-sensitive rose 0.1% to 0.7385.
The U.S. central bank kept interest rates steady on Wednesday at the end of its latest , as widely expected, while suggesting that the U.S. economy was making progress towards the levels where the Fed members would agree to tapering monthly bond purchases.
However, comments from Chairman Jerome Powell that rate increases were “a ways away” and that the job market still had “some ground to cover” before the central bank begins to taper its assets weighed on the dollar.
His comments mean that investors will be keeping a close eye on the latest economic data. The weekly , due at 8:30 AM ET (1230 GMT), are set to show a continued decline, while the release at the same time is expected to show 8.5% annualized growth, a sharp increase from the 6.4% growth seen in the previous quarter.
“We still find it likely that a tapering decision is taken in September with a formal slowdown of the purchases from December and onwards,” said analysts at Nordea, in a note. “We expect the Fed to be able to finalize tapering by the summer of 2022.”
Elsewhere, edged 0.3% lower to 6.4731, with the yuan regaining a lot of the ground it lost due to the regulatory onslaught against technology companies that rattled local equity and bond markets. .
Helping the tone Thursday were reports saying that China’s securities regulator called a select group of foreign and Chinese banks and institutional investors late on Wednesday to try and soothe nerves. CNBC reported that China would continue to allow companies to list in the United States.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.