The dollar weakened against its peers coming off session highs as the market remained cautious leading up to the release of meeting minutes from the Federal Reserve. The dollar had been supported on the back of yesterday’s data release by the Institute of Supply Management which revealed that its non-manufacturing purchasing managers’ index rose from a reading of 53.4 in February to 54.5 in March. The dollar’s advances were curtailed as data revealed that the US trade deficit grew from $45.88 billion in January to $47.06 billion in February. The dollar moved marginally higher after the FOMC meeting minutes revealed that some of its members were in support of a rate increase for March although a hike slated for April is most likely not in the cards. The US dollar index was last down 0.24% trading at 94.37 off its session high of 95.07.
The euro strengthened against the dollar with the pair up 0.26% trading at 1.1414 after the Fed’s release off its session high of 1.1432 after having come off its session low of 1.1326 reached earlier in the day. Data released out of the euro zone earlier in the session revealed that industrial activity for Germany dropped 0.5% in February beating expectations for a decrease of 1.8% while euro zone retail PMI dropped to a reading of 49.5 with the euro holding steady.
The pound weakened against the dollar with the pair down 0.21% after the FOMC’s release trading at 1.4131 off its session high of 1.4170 after having come off its session low of 1.4004 reached earlier in the day. The pair had rebounded off its low back beyond highs set earlier in the session. The pound has faced severe pressure to sell in mid-week trade sliding to new lows against both the dollar and the euro with losses posted against the Aussie and kiwi dollars. There have been no economic data releases out of the UK to justify the selloff and there has been no change in the “Brexit” debate.
The yen strengthened against the dollar with the pair down 0.69% trading at 109.58 after the Fed’s release off its session low of 109.33 after having come off its session high of 110.64 reached earlier in the day. The yen maintained support following remarks from Japanese Prime Minister Shinzo Abe highlighting the viewpoint that central banks should step away from intervening to weaken their currencies with kneejerk initiatives. The yen’s gains to 17 month highs against the dollar have heightened talk of how much further will the yen rise before the Bank of Japan intervenes to lower it.
The Australian, New Zealand and Canadian dollars strengthened against the greenback as commodity associated currencies were supported by a rise in oil prices on the back of a sudden decline in stockpiles as speculation of an output freeze continues. Crude oil stockpiles dropped by 4.3 million barrels last week with crude oil futures up 2.59% to trade at $36.82 per barrel. The Aussie dollar rose 0.66% against the greenback with the pair trading at 0.7594 after the Fed’s release off its session high of 0.7619 after having come off its session low of 0.7532 reached earlier in the day. The kiwi dollar added 0.19% against the greenback with the pair trading at 0.6820 after the Fed’s release off its session high of 0.6844 after having come off its session low of 0.6773 reached earlier in the day. The loonie gained 0.19% against the dollar with the pair trading at 1.3112 after the Fed’s release off its session low of 1.3061 after having come off its session high of 1.3185 reached earlier in the day.
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