Post-election Dollar recovery on Thursday as the greenback is moving away from 2-1/2-week lows hit on Wednesday. The dollar rose as the market breathed a sigh of relief after the U.S. midterm elections. Further, investors turned their attention towards the Federal Reserve policy meeting.
The Federal Reserve is expected to keep interest rates on hold but signal further tightening in December.
The dollar index edged up 0.1% to 96.125 as the mid-term elections resulted in a divided Congress. The results were largely cheered by a rallying Wall Street.
Forex – Commodities – Post-election Dollar Recovery; Oil drops
Elsewhere, the euro was largely unmoved ahead of a report from the European Commission that is expected to highlight the country’s 2019 deficit may be much higher than suggested by Italy. Rome remains locked in a dispute with European officials over its budget spending plans. The euro rose 0.1% to $1.4440.
Other major currencies largely traded in narrow ranges.
The British pound remained off recent highs after a strong rally on the back of optimism for a Brexit deal.
The dollar strengthened 0.2 versus the yen to trade at 113.70. The dollar has gained over the past week versus the yen due to the diverging monetary policies of the Fed and the BoJ.
While the Fed is to raise interest rates the Bank of Japan will press on with ultra-loose monetary policy. The widening interest rate differential between U.S. and Japanese bonds has made the dollar more attractive than the yen.The Japanese currency is often a funding currency for carry trades.
The New Zealand dollar traded roughly flat at $0.6788. Besides, little reaction to its central bank kept rates on hold at 1.75 percent on Thursday.
The Australian dollar built on its gains of the previous three trading sessions versus the greenback to trade up 0.3%. The Aussie was cheered by stronger than expected trade data out of China, its largest trade partner.
Oil edged lower on Thursday, surrendering early gains, as investors focused on the pace of growth in global crude supply. Crude supply is increasing more quickly than many had expected.
Brent crude futures fell 21 cents to $71.86 a barrel, having touched a session high of $73.08. Moreover, U.S. crude futures fell 8 cents to $61.59.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.