CURRENCIES: Dollar Dips As 'skeptical' Market Braces For Fed Minutes
November 22 2017 - 10:43AM
Dow Jones News
By Victor Reklaitis, MarketWatch , Anneken Tappe
The dollar lost ground Wednesday against most of its major
rivals, as traders braced for Federal Reserve minutes due later in
the day.
Where are currencies trading?
The ICE U.S. Dollar Index was down 0.3% at 93.637, down from
93.962 late Tuesday. Meanwhile, the broader WSJ U.S. Dollar Index
slipped 0.3.% to 86.97.
The dollar was down against the Japanese yen , buying Yen111.83,
down from Yen112.44 late Tuesday in New York.
The British pound had a volatile morning, initially losing
ground upon the release of the U.K. budget, before recovering.
Sterling last bought $1.3277, up from $1.3237 late Tuesday,
The euro benefited from the weaker buck, rising to $1.1781, up
from $1.1738 late Tuesday in New York.
The dollar was also weaker against the Canadian dollar and the
Swiss franc , buying C$1.2754, down 0.3%, and 0.9858, down 0.5%,
respectively.
What is driving the market?
Market participants are focused on the minutes from the Fed's
Nov. 1 meeting, which are due at 2 p.m. Eastern.
The minutes are widely expected to show the Fed is poised to
raise its benchmark short-term interest rate to a range of 1.25% to
1.5% at its Dec. 12-13 meeting. But there are doubts about what
could come after that, and they appear to be weighing on the
dollar.
Read:Fed minutes likely to green light hike in December, but
inflation debate still unsettled
(http://www.marketwatch.com/story/fed-minutes-likely-to-greenlight-rate-hike-in-december-but-inflation-debate-still-unsettled-2017-11-21)
In the U.K., attention was centered on the autumn budget, which
included setting GBP3 billion aside for costs incurred in
connections with Brexit, as well as a cut to growth forecasts.
British gross domestic product is now expected to grow by 1.5% in
2017, down from 2% expected in March. For 2018 and 2019, the growth
forecast has been slashed to 1.4% from 1.6%, and 1.3% from 1.7%,
respectively.
Overshadowing the budget is Brexit, as a divorce deal between
London and Brussels is meant to be reached within three weeks,
according to reports.
Read:Here's why German political turmoil could hurt sterling
more than euro
(http://www.marketwatch.com/story/heres-why-german-political-turmoil-could-hurt-sterling-more-than-the-euro-2017-11-21)
What are strategists saying?
"Dollar-yen dripped lower all night long finally tripping the
Yen112 barrier where it held ground in subdued morning London
dealing," said Boris Schlossberg, managing director of FX strategy
at BK Asset Management, in a note. That said that rising equity
markets, steady yields and supportive economic data should actually
support the dollar here.
"The problem for the pair is that market remains skeptical about
any further rate hikes in 2018," Schlossberg added.
What are the data?
Jobless claims for the week ended Nov. 18 read 239,750, compared
with the MarketWatch consensus estimate of 240,000.
In other data, durable goods orders slipped 1.2% in October
(http://www.marketwatch.com/story/us-durable-goods-orders-fall-12-in-october-in-whats-likely-a-temporary-setback-2017-11-22),
versus the MarketWatch consensus forecast of 0.5% growth. Core
capex orders for the same month fell by 0.5%, after growing 1.7% in
September.
Consumer sentiment for November stood at 98.5, topping both the
previous reading of 97.8 and the consensus forecast of 98.
The Fed minutes are due at 2 p.m. Eastern.
See:MarketWatch's Economic Calendar
(http://www.marketwatch.com/economy-politics/calendars/economic)
(END) Dow Jones Newswires
November 22, 2017 10:28 ET (15:28 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.