The US Dollar recovered some of its previous day’s losses which occurred after one Federal Reserve Bank official cautioned the Fed on removing economic support too quickly. Many investors had expected Lael Brainard to reinforce the Fed’s own view of a tighter monetary policy, but the well-known dove instead suggested that the current level of liquidity should, perhaps, be maintained for a longer period. At this point, it seems markets have decided to take a wait-and-see approach to the timing of the next Fed rate hike, given that there are disparate cases from the various Fed members.
As reported at 10:46 am (BST) in London, the EUR/USD was trading at $1.122, down 0.10%; the pair had earlier hit a low of $1.1214, while it’s session peak was at $1.1243. The GBP/USD was down 0.43% at $1.3272, with the daily price ranging from $1.3277 to a peak of $1.3342.
Oil Prices Weigh on Commodity Currencies
A drop in the price of oil pushed commodity linked currencies lower, with the AUD/USD trading at $0.7528, down 0.4893% while the NZD/USD was down 0.2787% and was trading at $0.733. The USD/CAD was up 0.44% to trade at C$1.3097. Even a better than expected figure in Chinese industrial output for August provided only muted support for the commodity currencies, and as a result risk appetite was generally lower.
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