The dollar firmed against major currencies on Thursday following the U.S. Federal Reserve’s upbeat assessment of the economic recovery and as its increased tolerance for higher inflation pushed Treasury yields higher.
The greenback initially fell after the Fed’s announcement and weaker-than-expected U.S. retail sales data but swung into positive territory after Chair Jerome Powell’s comment on the economic outlook.
The Bank of Japan kept its monetary policy steady on Thursday and said the country’s economy “remains in a severe state but has started to pick up,” suggesting no immediate stimulus was needed to support activity.
The safe-haven Japanese yen changed hands at 105.02 against the greenback, a fraction below a 2-1/2-month high of 104.81 marked overnight. The dollar is changing hands at 1.1760 against the euro, which briefly hit a one-month low. The pound was last at $1.2937, after dropping more than 3.5% against the greenback last week.
Oil prices fell on Thursday, after rising in the two previous sessions, as concerns about weak fuel demand re-emerged after production platforms in the south-eastern United States took steps to resume output following Hurricane Sally’s passage.
Gold was down on Thursday morning, as a stronger dollar pulled the yellow metal back from its two-week high. Better-than-expected U.S. unemployment figures were behind the improved dollar.
Looking forward in the session ahead, the Bank of England is likely to signal that it is getting ready to pump more stimulus into Britain’s coronavirus-hit economy at its policy decision at 11:00 GMT.
Later, in the NA session, Weekly jobless claims report comes at 12:30 GMT. Initial applications are for the week ending September 11, which is when Non-Farm Payrolls surveys are held. Economists expect another gradual decline. US building permits, housing starts, and the Philly Fed Manufacturing Index are also out today.