Dollar Plunges as Market Weighs on Federal Reserve’s Minutes

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Dollar Plunges as Market Weighs on Federal Reserve’s MinutesThe dollar plunged to its lowest in three weeks versus the Swiss franc and the yen on Thursday. The decline was fuelled by a report of the minutes of the Federal Reserve’s policy meeting on March that indicated that a hike in interest rates won’t happen anytime soon.

The dollar was trading 0.5 percent lower against the yen at 101.41, after earlier touching 101.34, its lowest level since March 19. The U.S. currency also fell against the Swiss franc to 0.8753, a three-week low as the Treasury’s two year bonds plunged steeply. The dollar was last trading 0.4 percent lower at 0.8760 franc.

The dollar index also plunged to its 79.330, its lowest level in three weeks, which is slightly below 80.599, its strongest level in seven weeks which it hit on April 4. It fell 0.1 to 79.378 by the time the article was published.

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The dollar has recorded weak performance against the yen in four out of the past five trading sessions. The currency also plunged against the Swiss franc for the fourth consecutive trading day on Thursday.

A report by U.S. Labor Department that showed that new jobless claims fell to nearly a seven-year low failed to prop the dollar. New unemployment claims declined to 300,000, well below economists’ estimate of 320,000.

“The events of the past week have tempered expectations for an early rate rise and that has undermined the dollar,” Joe Manimbo, a Washington-based senior market analyst at Western Union Business Solutions told Reuters. “Prior to the Fed minutes, the market was expecting a rate increase in early 2015. Now it has been pushed back to the middle or even the second half of next year,” he said.

To contact the reporter of this story; Yashu Gola at yashu@forexminute.com