Dollar Mixed Ahead Of FOMC Minutes
The US dollar showed mixed performance in early New York deals on Wednesday, ahead of the U.S. FOMC minutes that is expected to provide fresh clues on Fed's stimulus exit strategy.
Traders will look closely at the minutes of its July 30-31 FOMC meeting to be released at 2 pm ET, for clues on the precise timing and scale of any tapering by the Federal Reserve. Many market participants expect the Fed to announce a reduction to its asset purchases at its September 17-18 policy meeting.
Ahead of the minutes, the National Association of Realtors is scheduled to release its existing home sales report for July at 10:00 am ET. Economists expect existing home sales to come in at a seasonally adjusted annual rate of 5.150 million units.
The Energy Information Administration is due to release its petroleum inventory report for the week ended August 16th at 10:30 am ET.
Elsewhere, the Bank of Japan Governor Haruhiko Kuroda repeated his earlier remarks that the central bank would not hesitate to provide further stimulus in order to prevent the economy from slipping back into deflation.
The dollar dropped back to below the pivotal 1.57 level against the pound after a gap of more than 2-months, down by more than 0.2 percent from its overnight closing value of 1.5666.
The key support for the greenback is seen around the 1.5750/50 area and the likelihood of breaking this point could sent the U.S. currency to its weakest level against the sterling since February 11.
The dollar, however, advanced against the euro in early New York trading on Wednesday. The greenback climbed to 1.3381 against the common currency, bouncing back from yesterday's fresh multi-month lows of 1.3451.
The dollar rebounded to above 0.92 against the Swiss franc, after having dropped briefly below the key 0.9150 support for the first time after a gap of more than 2-months on Wednesday. If the present bounce persists for the greenback-franc pair, 0.9230 is seen as the next likely resistance level in the near-term.
The greenback traded in narrow ranges against the yen in early deals, moving between a high of 97.55 and a low of 97.37. The broader technical picture shows indecision in the near-term as the pair is swinging back and forth in a descending triangle, but nowhere near the trend-line support/resistance areas.
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