USD is stable near the 5-week low

17.03.2017

The dollar exchange rate slightly changed close to the five-week low against other major currencies. The tone of the Fed's latest decision reduced demand for the US currency.

EUR/USD rose 0.11% to a five-week high of 1.0778.

After the announcement of the Fed's decision, the dollar's rate declined, as the statements of the US central bank's members turned out to be less "hawkish" as predicted. The Fed maintained its forecast for three interest rate increases in 2017 rather than four, as some traders had hoped.

As expected, the Fed raised the interest rate by 25 basis points to 1.00%.

In the US, the number of initial applications for unemployment benefits fell to 241,000, the volume of new homes buildings rose in February to 1.288 million, which is better than expected, and the index of manufacturing activity of the Federal Reserve Bank of Philadelphia exceeded expectations, reaching 32.8 in March.

Support for the euro persists after the victory in the Netherlands elections of center-right Prime Minister Mark Rutte over the anti-Islamic politician Gert Wilders. This has lessened concerns about the withdrawal of the Netherlands from the European Union.

GBP/USD fell 0.14% to 1.2341, moving away from the two-week high of the previous session at 1.2378.

The pound rate strengthened after the Bank of England kept the interest rate at a historically low level. However, the minutes of the Committee for Monetary Policy indicate that the decision on the value of the interest rate was not unanimous. The vote was 8 to 1 against the expected 9-0.

USD/JPY remained stable at 113.31 amid reports that the Bank of Japan kept its monetary policy unchanged. This again indicates the discrepancies in the monetary policy of the world's major central banks.

The index of the US dollar, which shows the purchasing power of the dollar against the trade-weighted basket of six major currencies, remained stable at the position of 100.07, the lowest value since February 9.

The People's Bank of China set the reference rate of the Yuan against the USD at 6.8873 after yesterday's closing level of 6.9003.

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