Greenback stages rebound after finding floor at 94 level on Thursday, yet trading near eight-week low against the euro and may show weekly decline against other major currency rivals as the July FED Minutes showed that the policy makers are in no hurry to raise rates. Janet Yellen, the head of Federal Reserve is expected to lean towards extended period of cheap borrowing costs in her speech on next week dampening appeal of the dollar for investors.
The dollar index walked away from yesterday lows and trades near 94.42 level (+0.32%). On Thursday, the index dipped to 94.077, the worst performance since 23 June.
Fed officials continue to pursue their notion about “data-dependency” in calculating future monetary moves, though they were generally optimistic about the outlook of the US economy and the labor market. The president of the Federal Reserve Bank of San Francisco John Williams stressed that he was not in favor of a rate hike in haste, but warned that the pace of economy growth could get out of control if rates stay low for too long. Meanwhile the Head of Federal Reserve Bank of New York William Dudley said that stable employment and return to the labor market of job offers with average level of salaries argue for upturn in the US economy, saying Rate hike could happen as early as in September.
December likelihood of rate hike by 25 bp declined to 39.5% on Friday comparing with 41.7% odds reached on Thursday. Meanwhile the odds of rate hike by 50 bp rose from 5.7% to 7.1%:
Data on Thursday showed that the number of US citizens applying for unemployment benefits has declined substantially than expected over the past week, propped by the views of labor market stability.
Euro fell 0.33 percent to $ 1.1315 as Dollar upturn gains speed. The Australian dollar was down 0.57 percent to $ 0.7642.