U.S. Dollar Falls On Stimulus Hopes, Fed Policy Statement
17 December 2020 - 1:46PM
RTTF2
The U.S. dollar depreciated against its major counterparts in
the Asian session on Thursday, as the Fed committed to keep its
benchmark interest rate near zero and on improved risk sentiment
amid hopes of fiscal stimulus in the United States.
The Fed kept the short-term interest rates unchanged at the
range of 0.0 percent and 0.25 percent and said that it will
continue its asset purchase program until the economy shows
substantial progressed towards the central bank's goals of maximum
employment and price stability.
Congressional leaders edged closer towards a $900 billion aid
package, which includes stimulus checks, funding for small
businesses and extended unemployment benefits.
"We're still close and we're gonna get there," U.S. Senate
Majority Leader Mitch McConnell of Kentucky told reporters.
Investors await economic reports on U.S. weekly jobless claims,
housing starts and Philadelphia-area manufacturing activity due
later in the day.
The greenback weakened to 103.21 against the yen, its lowest
level since November 9. The currency is likely to find support
around the 101.00 level.
The greenback edged down to 0.8834 against the franc, from a
high of 0.8858 seen at 7:15 pm ET. If the dollar slides further,
0.86 is possibly seen as its next support level.
The greenback dipped to 2-1/2-year lows of 1.2236 against the
euro and 1.3574 against the pound, from yesterday's closing values
of 1.2197 and 1.3508, respectively. The greenback is seen finding
support around 1.24 against the euro and 1.37 against the
pound.
The U.S. currency reached as low as 1.2707 against the loonie,
compared to Wednesday's close of 1.2740. Next likely support for
the greenback is seen around the 1.24 level.
The greenback was lower against the aussie and the kiwi,
touching 2-1/2-year lows of 0.7615 and 0.7145, respectively. The
greenback had ended yesterday's deals at 0.7575 against the aussie
and 0.7111 versus the kiwi. The greenback is poised to challenge
support around 0.78 against the aussie and 0.74 against the
kiwi.
Looking ahead, the Swiss National Bank's monetary policy
announcement will be out at 3:30 am ET. Economists widely expect
the central bank to maintain policy rate at -0.75 percent.
Eurozone final CPI for November will be released in the European
session.
The Bank of England's monetary policy announcement is due at
7:00 am ET. The Monetary Policy Committee is widely expected to
hold the key rate at a record low of 0.10 percent and the
quantitative easing programme at GBP 825 billion.
The U.S. weekly jobless claims for the week ended December 12
and housing starts and building permits for November are scheduled
for release in the New York session.
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