The US dollar declined today as disappointing macroeconomic reports from the United States and the dovish stance of the Federal Reserve discouraged traders from buying the currency. The greenback was slowly regaining its footing against the euro but remained soft against other majors.
Basically all Thursday’s US indicators were worse than expected, including initial jobless claims, the manufacturing index and the housing data. The notable exception was the leading index that rose faster than market participants have anticipated.
On Wednesday, the Federal Reserve released minutes of its April meeting. The minutes revealed that the majority of Fed’s board members do not expect the economic situation to warrant an interest rate hike in June:
A few anticipated that the information that would accrue by the time of the June meeting would likely indicate sufficient improvement in the economic outlook to lead the Committee to judge that its conditions for beginning policy firming had been met. Many participants, however, thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising the target range for the federal funds rate had been satisfied, al-though they generally did not rule out this possibility.
With all the negative news, there are few reasons for traders to buy the dollar.
EUR/USD traded at 1.1108 as of 22:06 GMT today after rising from 1.1092 to 1.1181 earlier. GBP/USD gained from 1.5534 to 1.5659. USD/JPY edged lower from 121.31 to 121.06.
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