U.S. Dollar Higher On Rising Fed Tapering Hopes
30 September 2021 - 8:01PM
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The U.S. dollar held firm in the European session on Thursday on
growing hopes that the Fed could begin withdrawing its stimulus
measures at its next meeting in November.
In a panel discussion at the ECB Forum on Central Banking,
Chairman Jerome Powell said that inflation could remain elevated
longer than previously thought due to supply chain problems.
Powell added that inflationary pressures could moderate when
bottlenecks are resolved and the inflation rate would fall back to
its longer run target of 2 percent.
Powell will appear before the U.S. House Committee on Financial
Services at 10 am ET.
Senate Majority Leader Chuck Schumer said that Senators have
reached a deal to avoid a government shutdown on October 1.
The legislation would keep the government funded through
December 3 but does not raise the debt limit to prevent a default
on obligations.
Data from the Commerce Department showed that U.S. economic
growth accelerated slightly more than previously estimated in the
second quarter.
The Commerce Department said real gross domestic product shot up
by 6.7 percent in the second quarter compared to the previously
reported 6.6 percent spike. Economists had expected the jump in GDP
to be unrevised.
The greenback showed mixed trading versus its major opponents in
the Asian session, by falling against the yen and the pound and
holding steady against the franc and the euro.
The greenback appreciated to nearly a 6-month high of 0.9368
against the franc and a 1-1/2-year high of 112.08 against the yen,
from yesterday's closing values of 0.9338 and 111.94, respectively.
The greenback is poised to face resistance around 0.95 against the
franc and 114.00 against the yen.
The greenback touched more than a 1-year high of 1.1568 against
the euro, rising from Wednesday's close of 1.14. Should the
greenback rises further, 1.12 is likely seen as its next resistance
level.
Data from the Federal Labor Agency showed that Germany's
unemployment rate remained unchanged in September.
The unemployment rate held steady at seasonally adjusted 5.5
percent in September. The expected rate was 5.4 percent.
The greenback recovered to 1.2756 against the loonie, off an
early low of 1.2711. The greenback was trading at 1.2752 against
the loonie at yesterday's close. On the upside, 1.29 is likely seen
as its next resistance level.
In contrast, the greenback pulled back from its prior highs of
0.6860 against the kiwi and 0.7170 against the aussie and was
trading at 0.6891 and 0.7222, respectively. The currency may locate
support around 0.70 against the kiwi and 0.75 against the
aussie.
The greenback weakened to 1.3495 against the pound from
yesterday's close of 1.3425. The greenback is seen facing support
around the 1.36 level.
Revised data from the Office for National Statistics showed that
the UK economy grew more than initially estimated in the second
quarter on robust consumption.
Gross domestic product grew 5.5 percent sequentially instead of
4.8 percent growth estimated previously. The expansion has reversed
first quarter's 1.4 percent contraction.
Federal Reserve Bank of New York President John Williams is
scheduled to deliver opening remarks at a webinar about the Fed's
pandemic response hosted by the bank at 10:00 am ET.
Federal Reserve Bank of Atlanta President Raphael Bostic will
speak about economic mobility at an online event hosted by Georgia
Tech University at 11:00 am ET.
At 12:30 pm ET, Federal Reserve Bank of Chicago President
Charles Evans will deliver a speech about the economic outlook at
an online event hosted by the Bendheim Center for Finance.
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