The US Dollar has strengthened against Sterling and made gains against the majority of its most traded peers after data showed that inflation gained less than forecast in May, increasing speculation that the Federal Reserve will announce a reduction to its monetary easing programme.
According to the Washington based Labour Department the latest consumer price index edged up by 0.1% in May after falling y 0.4% in April. Economists had been expecting an increase of 0.2%. Due to the continuingly weak global economic outlook companies were unable to raise prices easing the risk of higher inflation.
The lack of inflation gives Federal Reserve policy makers, meeting today and tomorrow in Washington, more leeway to address unemployment as they consider whether to dial down their record monetary stimulus.
Adding to the sense of improvement in the US economy was the release of data which showed that the number of new houses being constructed in the US increased in May. Permits for single-family houses jumped to a five-year high, extending a rebound that is helping to shore up the economy’s expansion.
Despite the rise the overall figure came in less than economists had forecast hinting that the US economy still has some way to go before the Fed will be willing to halt its QE policy. The overall number of new building permits fell from the previous month.
Against the Canadian Dollar the ‘Greenback’ advanced for a third day.
All eyes will be glued to the US Federal Reserve on Wednesday, as the Federal Open Market Committee releases a highly anticipated policy statement. If the Fed does take action or even hint at a move to tighten QE, we can expect the dollar to move higher against the major currencies.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6418
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7486
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0563
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 95.5857
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0213
The Pound Sterling/ US Dollar Exchange Rate is currently in the region of: 1.5579
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3358
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9466
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9791
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.7995
(Correct as of 14:35 pm GMT)
Comments are closed.