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Forex - Dollar gains as market looks past Fed, tracks solid data

Published 09/19/2013, 03:05 PM
Updated 09/19/2013, 03:06 PM
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Investing.com - The dollar firmed against most major currencies on Thursday after investors looked past a Federal Reserve decision to continue stimulating the U.S. economy via its USD85 billion monthly bond-buying program.

Solid manufacturing and labor-market reports enticed investors to take up nicely-priced positions in the greenback.

In U.S. trading on Thursday, EUR/USD was up 0.03% at 1.3526.

The Federal Reserve on Wednesday concluded a two-day monetary policy meeting and made no changes to its USD85 billion bond-buying program, a stimulus tool that weakens the dollar to spur recovery.

Many market participants were expecting the U.S. central bank to trim the total by USD10 billion or more now that the economy is improving, though the Fed said it wanted to see more evidence that recovery will be sustained before adjusting the pace of its purchases.

Many investors felt that evidence became apparent on Thursday in the form of improving factory and labor-market reports.

The Federal Reserve Bank of Philadelphia said its Philly Fed manufacturing index rose to a 30-month high of 22.3 in September from 9.3 in August, blowing past expectations for an increase to 10.0.

Industry data revealed that U.S. existing home sales rose 1.7% to 5.48 million units last month, from 5.39 million in July. Analysts were expecting existing home sales to fall 2.6% to 5.25 million units in August.

Also on Thursday, the Department of Labor reported that the number of individuals filing for initial jobless claims in the U.S. rose by 15,000 to a seasonally adjusted 309,000 in the week ending Sept. 14, from an upwardly revised 294,000 the previous week.

Analysts were expecting the number to rise by 36,000 to 330,000 last week.

Elsewhere, the U.S. current account deficit narrowed to USD98.9 billion in the second quarter, from an downwardly revised deficit of USD104.9 billion in the three months to March. Analysts were expecting the current account deficit to narrow to a USD97 billion.

The greenback was up against the pound, with GBP/USD down 0.68% at 1.6034.

The dollar was up against the yen, with USD/JPY up 1.40% at 99.31, and down against the Swiss franc, with USD/CHF trading down 0.16% at 0.9105.

The yen slumped against most currencies after Bank of Japan Board Member Takahide Kiuchi said the central bank may come under pressure soon to expand its easing programs.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.41% at 1.0262, AUD/USD down 0.87% at 0.9438 and NZD/USD trading down 0.04% at 0.8366.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.31% at 80.48.










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