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Forex - Dollar mostly higher on the back of Fed comments

Published 08/07/2013, 09:19 PM
Updated 08/07/2013, 09:20 PM
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Investing.com - The U.S. dollar traded higher against most of its major rivals during Thursday Asian session after getting a lift from supportive commentary from various Federal Reserve members.

In Asian trading Thursday, EUR/USD inched down 0.04% to 1.3333 after Official data released earlier revealed that German industrial production jumped 2.4% in June, far surpassing expectations for a 0.3% increase.

The report came one day after stronger-than-forecast German factory orders data reinforced expectations that the euro zone recovery may be gaining steam. Germany is the euro zone’s largest economy.

USD/JPY jumped 0.56% to 96.90 after the Ministry of Finance said that Japan’s current account balance rose to JPY650 billion in July from JPY620 billion in June. Analysts expected a July reading of JPY730 billion.

In a separate report, the Bank of Japan said that bank lending in the world’s third-largest economy rose 2% in the second-quarter after a first-quarter increase of 1.9%. Analysts expected a second-quarter increase of 1.9%.

BoJ concludes a two-day meeting with traders expecting little in the way of surprises.

GBP/USD was flat at 1.5490 after the Bank of England left interest rates unchanged and in line with market expectations.

USD/CHF rose 0.10% to 0.9228 while USD/CAD was flat at 1.0425 as oil prices drifted modestly to the upside.

Federal Reserve Bank of Chicago President Charles Evans, a noted policy dove, said the U.S. central bank could begin tapering its USD85 billion per month bond-buying program later this year if the economy improves.

Other monetary authorities including Federal Reserve Bank of Dallas President Richard Fisher and Atlanta Fed Chief Atlanta Fed president Dennis Lockhart made similar comments, pressuring dollar-denominated commodities in the process.

Earlier this week, Fisher warned that investors have become too accustomed to the Fed supporting riskier assets and that asset-buying by central banks cannot continue indefinitely.

AUD/USD rose 0.34% to 0.9031 while NZD/USD fell 0.14% to 0.7960. The U.S. Dollar Index added 0.09% to 81.37.


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