Thursday, January 28, 2016

Forex - Dollar steady against rivals after Fed statement

Investing.com - Investing.com - The dollar was steady against the other major currencies on Thursday after the Federal Reserve said it is 'closely monitoring' the global economy as it left interest rates on hold at the outcome of its January meeting.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was at 98.98, holding below last Thursday's seven-week highs of 99.95.

The Fed left interest rates on hold at the conclusion of its two-day policy meeting on Wednesday, after raising interest rates for the first time in nearly a decade in December.

The U.S. economy is still on track for moderate growth and a stronger labor market even with "gradual" rate increases, the bank said.

Policymakers acknowledged heightened uncertainty over the global economic outlook after recent turmoil in financial markets.

'The Committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook,' the Fed statement said.

The dollar pushed higher against the yen, with USD/JPY rising 0.17% to 118.86, not far from the three-week high of 119.05 hit on Wednesday.

Investors were beginning to turn their attention to the conclusion of the of the Bank of Japan meeting on Friday.

Most analysts are expecting no changes to monetary policy, but recent weakness in economic reports, as well as comments by BoJ officials have fueled expectations for more easing this year.

The euro edged higher against the dollar, with EUR/USD easing up to 1.0901.

The pound gained ground, with GBP/USD rising 0.24% to 1.4269, but remained not far from seven-year lows ahead of preliminary data on U.K. fourth quarter growth later in the session.

The New Zealand dollar firmed up after falling earlier when the country's central bank kept interest rates on hold at 0.25%, but said further easing may be necessary.

NZD/USD was last up 0.44% to 0.6457 after falling to lows of 0.6418 overnight.

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