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Forex News: U.S. Dollar Weakens After Fed Rate Cut

U.S. Dollar Weakens After Fed Rate Cut

10/31/2019 - 03:16:00 (RTTNews)

(RTTNews) - The U.S. dollar depreciated against its major counterparts in the Asian session on Thursday, after the U.S. Federal Reserve cut interest rates for the third time this year, but signaled it may put further monetary policy easing on hold.

The Fed lowered the target range for the federal funds rate by 25 basis points to 1-1/2 to 1-3/4 percent.

But the Fed's accompanying statement removed a key line indicating the central bank would continue to "act as appropriate to sustain the expansion."

Rather, the Fed said it would continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate.

Investors await reports on weekly jobless claims and personal income and spending due later in the day.

The Labor Department's closely watched monthly jobs report is due out on Friday.

U.S. employment is expected to increase by 88,000 jobs in October after an increase of 136,000 jobs in September. The unemployment rate is seen rising to 3.6 percent from 3.5 percent.

The greenback fell to a 1-week low of 1.2934 against the pound, reversing from a high of 1.2894 hit at 5:00 pm ET. The next likely support for the greenback is seen around the 1.32 level.

Survey results from the market research group GfK showed that UK consumer confidence deteriorated more than expected in October as households became cautious over personal finances amid Brexit uncertainty.

The consumer confidence index fell to -14 in October from -12 in September. The reading was forecast to drop marginally to -13.

The greenback slipped to a 10-day low of 1.1171 against the euro, compared to Wednesday's closing value of 1.1150. The greenback is poised to challenge support around the 1.13 level.

The U.S. currency depreciated to 0.9866 against the Swiss franc, its lowest since October 22. The greenback is seen finding support around the 0.96 region.

The greenback weakened to a 6-day low of 108.59 against the yen and held steady thereafter. At Wednesday's close, the pair was worth 108.83.

The Bank of Japan maintained its policy rates but it signaled further monetary easing going forward.

The central bank said short and long-term interest rates are expected to remain at their current or lower levels as long as it is necessary to achieve its price stability target.

The greenback depreciated to a 9-day low of 0.6433 against the kiwi and more than a 3-month low of 0.6930 against the aussie, from yesterday's closing values of 0.6388 and 0.6903, respectively. On the downside, 0.66 and 0.71 are possibly seen as the next support levels for the greenback against the kiwi and the aussie, respectively.

The greenback edged lower to 1.3150 against the loonie, from a high of 1.3173 seen at 8:30 pm ET. Next immediate support for the greenback is seen around the 1.30 level.

Looking ahead, Eurozone consumer inflation for October, jobless rate for September and GDP data for the third quarter are due in the European session.

Canada GDP data for August, U.S. weekly jobless claims for the week ended October 26, personal income and spending data for September will be featured in the New York session.

For comments and feedback: contact editorial@rttnews.com

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