Dollar resumes losses ahead of Fed's meeting minutes
The US dollar fell on Wednesday, to resume its losses after pausing yesterday within recovery attempts from a 2-week low, due to slowing demand, and ahead of the release of the Federal Reserve's meeting minutes.
The dollar index fell 0.2% to 93.63 points, after opening at 93.83, and hit an intraday-high of 93.90.
The index gained 0.4% yesterday, within recovery attempts from a 2-week low 93.34 points.
The US dollar shined yesterday as the best alternative investment, after President Donald Trump postponed the new fiscal stimulus talks until after the US presidential election.
But soon demand slowed again, as Trump calmed the market's concerns by announcing offering support to airlines and the paycheck protection program, as part of a limited set of incentive measures to support the US economy until the election.
Otherwise, the latest polls by Reuters showed that the Democratic candidate Joe Biden have a 52% lead vs. 40% to the Republican candidate Donald Trump.
Most investors are preparing for Biden winning the US election, which is expected to lift the US dollar.
At 18:00 GMT the US Federal Reserve will release the minutes of its of its September 15-19 meeting, which is expected to provide additional insight on the future of the US monetary policy.
The Fed held the US rate between 0.25% and zero during the meeting, and pledged to keep it in this range until at least 2023, until full employment recovery, and adopted an average inflation targeting strategy, that will tolerate it above 2%.
While Federal Reserve Chairman Jerome Powell said that he expects economic growth to improve from more than the Fed had previously estimated last June.
The US dollar fell against most major currencies on Monday, as investors await a very busy week full of events. Chief among these events is the upcoming US presidential debate between the US President and Republican candidate Donald Trump versus his Democratic rival Joe Biden. The final reading of the US GDP for Q2 will also be released later this week, amid expectation that the US economy will continue shrinking due to the coronavirus crisis impact. The market is also anticipating the US monthly jobs report on Friday, which delivers key insight on the state of the US labor market and employment improvement from August. Several Federal Reserve members had recently expressed that the US economy recovery path from the coronavirus impact is continuing. The dollar index fell against a basket of currencies by 0.4% to 94.2 points as of 20:02 GMT, after it hit a high of 94.6 and a low of 94.1.
At 12:30 GMT, the Canadian economy released its monthly reading of the consumer price index, which fell by 0.1% in September, on par with forecasts and August's reading. The CPI y/y reading rose 0.4% vs. 0.1% in the previous reading, beating forecasts of 0.3%.
At 12:30 GMT, the US economy released it reading of the personal spending for August, which rose 1%, higher than estimates of 0.7%, but lower than the previous reading of 1.5% after it was revised from 1.9%.