The US Dollar has seen a slight weakening against a basket of currencies on the back of the Interest rate hike downgrade. The following report looks at the implications of this against other currencies, such as the Japenese Yen and Swiss Franc.
The US Dollar, although slowing gaining against the Pound, has been weakening against a basket of major currencies as of late, and this has been brought on by Janet Yellen’s dovish comments during her last speech regarding the US economy moving forward.
As attitude to risk has soured after the Fed Chairlady announced an intended two Interest Rate rises instead of the four originally planned, investors have seen falls in both Equity and Oil prices, as well as a run to safe haven assets such as the CHF and JPN, the later hitting a 17 month high against the US Dollar.
Yesterday US Dollar bulls were boosted by positive data regarding the US economy. The ISM Non-Manufacturing PMI, which gauges business conditions in the US non-manufacturing sector, came out above expectations and this boosted sentiment towards the greenback. The figure also showed an improvement on the previous figure from a month ago, and this coupled with the reduction in unemployment in the US released last Friday bodes well for the economy moving forward.
I’m expecting today’s biggest mover of currency markets to be the FOMC Minutes, as monetary policy moving forward is likely to be the key focus.
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