Dollar edges lower after Fed holds rates steady
By Saqib Iqbal Ahmed NEW YORK (Reuters) - The U.S. dollar edged lower against a basket of major currencies on Wednesday after the U.S.
By Saqib Iqbal Ahmed
NEW YORK (Reuters) - The U.S. dollar edged lower against a basket of major currencies on Wednesday after the U.S. Federal Reserve held interest rates steady and signalled borrowing costs are likely to remain unchanged indefinitely.
The Fed expects moderate economic growth and low unemployment to continue through next year's presidential election, the U.S. central bank's rate-setting committee said in its policy statement after the end of a two-day meeting on Wednesday.
The decision left the benchmark overnight lending rate in its current target range between 1.50% and 1.75%.
"The bar to a rate hike remains higher than the bar to lowering rates further, but overall you are looking at a Fed that is fairly confident about where the economy is headed and expects inflation to remain under pressure for a prolonged period of time," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
The dollar index <.DXY>, which measures the greenback against six other major currencies, was 0.2% lower at 97.218.
"Market participants are going to keep an eye out for the European Central Bank meeting tomorrow, but mostly will remain focused on what happens on Saturday with respect to U.S.-China trade negotiations," Schamotta said.
U.S. President Donald Trump has set Dec. 15 as the date to impose tariffs on nearly $160 billion in Chinese consumer goods, falling just days before Christmas in a move that could be unwelcome in both the United States and China. But it remains unclear if he Trump administration will go ahead with the tariffs.
"If we do see a delay in tariffs, that clears the way for other currencies to rise relative to the dollar," Schamotta said.
The euro was 0.23% higher ahead of new ECB boss Christine Lagarde's first policy meeting on Thursday, where investors will scrutinize her every word for a sense of the direction the bank will take under her leadership.
Elsewhere, Sweden's crown jumped to a more than four-month high against the dollar after strong inflation data made it highly likely the country would end negative interest rates. The dollar was 0.98% lower against the Swedish crown.
In another notable move, the Hong Kong dollar rallied to its strongest level since July 24, which analysts attributed to the unwinding of bets previously profiting from "carry trades" - borrowing with low interest rates in Hong Kong to purchase U.S. dollar assets.
The greenback was 0.22% lower against the Hong Kong dollar.
The pound was 0.3% higher in very thin trading a day ahead of Britain's general election, shrugging off a key opinion poll that showed the ruling Conservative Party might still fail to win a majority.
(Reporting by Saqib Iqbal Ahmed; Editing by Nick Zieminski and Leslie Adler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.