The US dollar extended its weakness today following yesterday’s minutes of the Federal Reserve’s latest policy meeting. Economic reports from the United States were mixed today, but traders preferred to pay attention to the negative part of the data.
Thursday’s US macroeconomic data did not give an edge to the dollar one way or the other. On one hand, jobless claims rose unexpectedly last week and the leading indicators demonstrated a surprise drop in July. On the other, existing home sales and the Philadelphia Fed Manufacturing Index were much better than economists had anticipated. Yet the greenback sank after the reports, suggesting that the market focused on the bad reports more than on the good ones.
It looks like chances for a September interest rate hike from the Fed diminish with every day, removing the major component in the dollar strength. It is not yet impossible for monetary firming to occur next month, but the probability of such an event seems very small.
EUR/USD jumped 1.1 percent from 1.1119 to 1.1241 as of 21:02 GMT today, trading near the highest level since June 29. GBP/USD traded at 1.5689 after opening at 1.5678 and falling to the session low of 1.5605. USD/JPY declined from 123.78 to 123.38, retreating after the earlier rally to the high of 124.15.
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