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By xemarketanalysis September 19, 2017 3:33 pm
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    XE Market Analysis: US Dollar Remains Soft as Fed Meeting Begins

    OVERVIEW

    • US housing starts fell for a second straight month, and building permits rise.
    • German ZEW survey stronger than expected, economic sentiment index rises to 17.0 from 10.0 in August.
    • GB Pound jumps 0.5 cents versus US Dollar after reports on Boris Johnson resign.
    • Euro slips after ECB sources say board split on setting an end date for bond purchases.
    • Aussie Dollar sees limited impact from upbeat RBA minutes.

    HIGHLIGHT

    The US Dollar is down against an overwhelming amount of currencies as the unexpected Trump victory rally ended abruptly. US growth has shown signs of picking up, but there are doubts about the Trump administration's ability to achieve its policy goals amid the Russia investing and distracting White House feuds. As the Federal Reserve begins its two-day meeting, expectations are that they will set a lower course for interest rates due to softer inflation that will do little to change the Dollar's weakening trend. 

    US DOLLAR

    The US Dollar is generally softer, though it is seeing limited movement ahead of tomorrow's FOMC meeting (see highlight).

    BRITISH POUND

    The Pound was weak early in the European session as traders reacted to comments from Mark Carney yesterday that didn't quite reflect the hawkishness that would be expected for a November rate increase hike. However, the Pound has recovered ground and was given a boost by a Telegraph newspaper report that said foreign secretary Boris Johnson is planning to resign if PM May doesn't support his 'hard Brexit' approach. 

    EURO

    The Euro initially fell on headlines suggesting some ECB doubts about tapering asset purchases due to the strength of the Euro. It subsequently rose to 1.20 as Germany's ZEW investor sentiment survey remained elevated at 87.9 in the month, above August’s 86.2 and countering expectations of a decline.

    CANADIAN DOLLAR

    The Canadian Dollar edged lower overnight following comments from the Bank of Canada Deputy Governor, Timothy Lane, who said they will pay close attention to how the economy responds to both higher interest rates and a stronger Canadian Dollar, and how it remains data-dependent. 

    AUSTRALIAN DOLLAR

    The Aussie Dollar continues its battle to hold above the 80 cents level versus the Dollar, with the RBA minutes showing the central bank has turned more upbeat on the economic outlook and labor market but remains concerned by rising household debt and a strong A$.

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