Breaking News

FOREX-Dollar advances after strong U.S. data, Fed minutes

ForexJan 04, 2018 01:50
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FOREX-Dollar advances after strong U.S. data, Fed minutes

* U.S. manufacturing, construction data boost dollar

* Minutes show Fed to continue raising rates gradually

* Coming Up: U.S. payrolls report on Friday (Adds details from Fed minutes, updates prices, table)

By Gertrude Chavez-Dreyfuss

NEW YORK, Jan 3 (Reuters) - The dollar rallied on Wednesday on upbeat U.S. manufacturing and construction data and after minutes from the Federal Reserve's last policy meeting showed the central bank remained on track to raise interest rates several times this year.

Snapping a three-week losing streak, the dollar hit session highs against the euro and yen after the minutes from the Fed's Dec. 12-13 meeting. The dollar index posted its largest daily gain in more than two weeks.

The Fed's minutes acknowledged the U.S. labor market's solid gains and the expansion in economic activity, even as they affirmed policymakers' worries about persistently low inflation. That suggested the central bank will continue to pursue a gradual approach in raising rates but could pick up the pace if inflation accelerates. officials also discussed the possibility that the Trump administration's tax cuts or easy financial conditions could cause inflation pressures to rise, leading to some dollar-buying, analysts said.

"The debate is the same. You have strong growth and low unemployment on one side and surprisingly low inflation on the other side," said Stephen Stanley, chief economist at Amherst Pierpont Securities in Stamford, Connecticut.

"They have been taking a middle-of-the-road on their policy approach, gradually raising interest rates and unwinding the balance sheet. They will continue the same tack."

The dollar gained earlier in the session after data showed U.S. construction spending rose 0.8 percent in November to an all-time high of $1.257 trillion, driven by a surge in investment in private residential and nonresidential projects. the same time, a U.S. manufacturing index as measured by the Institute for Supply Management rose to 59.7 last month, beating market expectations. analysts remained skeptical about the dollar's near-term prospects, noting the expected rate hikes have been priced in. Some also said modest U.S. inflation may encourage the Fed to go slower in raising rates.

In late trading, the dollar .DXY bounced 0.3 percent to 92.18 after falling 2.5 percent over the last three weeks. The dollar's 10 percent drop in 2017 was the largest annual decline in 14 years.

The greenback also rose 0.2 percent versus the yen to 112.51 yen JPY= on Wednesday.

Friday's U.S. non-farm payrolls report should provide more clarity about the outlook for interest rates this year.

The euro, meanwhile, slid 0.3 percent to $1.2016 EUR= after hitting a four-month high of $1.2081 on Tuesday, up roughly 3 percent from a mid-December trough.

The single European currency has been supported by improving prospects for the euro zone economy and expectations the European Central Bank will wind down its bond-buying stimulus in 2018.


Currency bid prices at 2:53PM (1953 GMT) Description



U.S. Close Pct Change


High Bid

Low Bid











+1.2003 Dollar/Yen






+112.6000 +112.1800 Euro/Yen






+135.4900 +134.8100 Dollar/Swiss







+0.9712 Sterling/Dollar GBP=






+1.3497 Dollar/Canadian CAD=






+1.2500 Australian/Doll AUD=






+0.7806 ar








+1.1701 Euro/Sterling







+0.8848 NZ







+0.7074 Dollar/Dollar








+8.0929 Euro/Norway







+9.7315 Dollar/Sweden







+8.1594 Euro/Sweden








<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ USD Index, Treasury yields



FOREX-Dollar advances after strong U.S. data, Fed minutes

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Write your thoughts here
Replace the attached chart with a new chart ?
Post also to:
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
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.
Continue with Google
Sign up with Email