The dollar surged to its highest level in 11 months against the euro as the market awaited the Federal Reserve to release the minutes of its August policy meeting.
The greenback rallied 0.3 percent to trade at $1.3285 per euro as of 8:15 a.m. in New York after earlier advancing to $1.3275, its highest level since September 13. Traders are looking to find any clues in the Fed’s minutes on the timing of the increase of U.S. interest rates. Various reports on Tuesday showed that inflation still lags the central bank’s target despite the recovery of the housing market.
“The focus is shifting to Friday’s speech by Yellen and Jackson Hole,” Manuel Oliveri, a London-based foreign-exchange strategist at Credit Agricole’s corporate and investment banking unit, told Bloomberg News. “There is the notion in the market that she may turn less dovish, that’s one of the reasons why the dollar is in demand.”
The Fed will release the minutes of its July 29-30 meeting when it reduced the pace of monthly bond purchases by $10 billion for the sixth consecutive time. Fed Chair Janet Yellen is due to speak on August 22 at an economic seminar convened by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming. European Central Bank President Mario Draghi is also scheduled to speak before the gathering of the world’s central bankers.
A report released yesterday showed that US consumer price index (CPI) jumped 0.1 percent in July from the previous month and up 0.2 percent in the year through July. The core CPI, which is adjusted for the volatile fuel and food, rose 0.1 percent.
Another survey showed that US housing starts grew 15.7 percent in July, the fastest pace since November, after two-months of straight declines. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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