NEW YORK, July 28 ― The US dollar edged lower against a basket of peer currencies yesterday as investors awaited the outcome of this week's two-day Federal Reserve policy meeting for any signals as to when the central bank will begin tapering its asset purchases.
The greenback was 0.263 per cent lower at 92.362 at 2.15pm ET, but still within striking distance of its 3-1/2 month high of 93.19 hit on July 21.
The US currency has risen broadly for more than a month on expectations that as the economic recovery gains steam, the Fed will begin to taper its monetary support to keep inflation in check. But the rise in Covid-19 Delta variant cases may cloud the outlook.
“The dollar has had a nice summer surge and I think the event risk that the Fed poses has been enough for dollar bulls to take some chips off the table,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.
The Fed began its two-day meeting yesterday, to be followed by a press conference by Chair Jerome Powell today.
“I think he's just going to signal to markets that they've been discussing the size of the taper, they're discussing how to taper, but they're still in somewhat of a wait-and-see mode, given where we are in the recovery,” said Edward Moya, senior market analyst at OANDA.
“So, they're going to try to punt it, but I think there will be some hawkishness.”
Data yesterday showed that US consumer confidence hovered at a 17-month high in July, suggesting the economy maintained its strong growth clip at the start of the third quarter.
Separately, the International Monetary Fund upgraded its growth outlook for the United States and other wealthy economies due to ongoing fiscal support and access to Covid-19 vaccines, while at the same time downgrading its estimates for a number of developing economies.
Overall, the IMF maintained its 6 per cent global growth forecast for 2021 in an update to its World Economic Outlook.
The euro edged up 0.26 per cent, changing hands at US$1.1833 (RM4.99) versus the greenback, while sterling gained 0.55 per cent to US$1.38925 as early data seemed to show an ebb in surging Covid-19 cases in Britain in spite of the removal of many social curbs last week.
Elsewhere, concern over the spread of the Delta variant and Hong Kong stock market jitters weighed on risk-oriented currencies.
The Australian dollar weakened 0.26 per cent while the New Zealand dollar was down 0.56 per cent.
The Chinese yuan held up despite turmoil in equities and was up 0.66 per cent at 6.5255.
In cryptocurrencies, bitcoin was up 1.04 per cent at US$37,677.58, but off its Monday high of over US$40,000, after Amazon.com said a weekend news report claiming it was preparing to accept crypto payments was false. ― Reuters
Source: Malay Mail
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