Dollar Rising After Federal Reserve Announcement

The dollar is climbing against its major competitors Wednesday afternoon, following the release of the Federal Reserve’s statement. The Fed decided against raising interest rates, waiting for a bit more confirmation that the economy is on solid ground.

Because there was no post-decision press conference scheduled this month, the Fed’s decision to stand pat was in line with market expectations.

A move is far more likely in September or December when Fed Chair Janet Yellen has the opportunity to calm investor fears at scheduled press conferences.

However, the Fed did not tip its hand about a September rate hike, as today’s press release differed only cosmetically from the statement that followed its June meeting.

The only hint about tightening in September was in the form of a modest upgrade in the assessment of the labor market.

“The labor market continued to improve, with solid job gains and declining unemployment,” the Fed said. “On balance, a range of labor market indicators suggests that underutilization of labor resources has diminished since early this year.”

Pending home sales in the U.S. unexpectedly decreased in the month of June, according to a report released by the National Association of Realtors on Wednesday, with pending sales pulling back off a nine-year high.

NAR said its pending home sales index fell by 1.8 percent to 110.3 in June, while economists had expected the index to increase by 1.0 percent.

The dollar began Wednesday’s session around $1.1080 against the Euro, but has broken out to a 2-day high of $1.0980 this afternoon.

German consumer morale is set to stabilize in August as income expectations improved further from record level on strong domestic fundamentals, survey data from market research group GfK revealed Wednesday.

Nonetheless, consumers assumed that the solution reached in the Greece debt dispute will have negative consequences on the economy.

The forward-looking consumer sentiment index came in at 10.1 points, unchanged from July and in line with expectations.

French consumer confidence decreased unexpectedly in July after improving in the previous month, survey data from the statistical office INSEE showed Wednesday. The consumer confidence index dropped slightly to 93 in July from 94 in June. Economists had expected the index to remain stable at 94.0.

The buck fell to a 3-week low of $1.5689 against the pound sterling Wednesday, but has since bounced back to around $1.56.

U.K. mortgage approvals increased more than expected in June and secured lending climbed most since 2008, data from the Bank of England showed Wednesday. The number of loan approvals for house purchase totaled 66,582 in June, up from 64,826 in May. It was forecast to increase marginally to 66,000.

U.K. retail sales growth is expected to slow next month after demand for clothing pushed up sales in July, the Distributive Trades Survey from the Confederation of British Industry showed Wednesday. The retail sales balance came in at +21 percent in July, which was below the expected score of +29 percent. A balance of +13 percent expects sales to increase in August.

The greenback slipped to an early low of Y123.327 against the Japanese Yen Wednesday, but has since climbed to a 3-day high of Y123.900.

The total value of retail sales in Japan advanced 0.9 percent on year in June, the Ministry of Economy, Trade and Industry said on Wednesday, coming in at 11.457 trillion yen. That missed forecasts for an increase of 1.1 percent following the 3.0 percent spike in May.

Confidence among Japan’s small and medium-sized enterprises increased in July to reach its highest level in four months, survey figures released by the Shoko Chukin Bank showed Wednesday.

The small business confidence index rose by 2.4 percentage points to 49.3 in July from 46.9 in the previous month. In May, the score was 48.1. The latest reading was the strongest since March this year, when it marked 49.8.

The material has been provided by InstaForex Company – www.instaforex.com

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