#XMINDO_FX Market - Aug 20 The U.S Dollar strengthened against major rivals on Tuesday, rising to an eleven-month high, amid bullish data, after a report showed housing starts reached the highest level in eight months, adding to evidence the U.S. economy is gaining traction, and as the cost of living in the U.S. climbed in July at the slowest pace in five months, indicating price pressures remain limited even as the economy picks up. Inflation continues to run below the Federal Reserve’s target as sluggish global demand limits companies’ ability to charge customers more. Restrained increases give the central bank’s policy makers room to keep interest rates low well after the projected end of their bond-buying program in October. The Dollar strengthened on Tuesday amid speculation faster economic growth will lead the Federal Reserve to raise interest rates next year, after beginning home construction climbed 15.7 percent to a 1.09 million annualized rate following June’s 945,000 pace, which was stronger than previously estimated. Permits for new construction, a sign of future demand, rose 8.1% to an annual rate of 1.05 million from 973,000 in June. This indicates the housing market has rebounded, which should provide some support for U.S. economic growth. From here, investors will look to a series of events that may help flesh out the Federal Reserve’s monetary policy outlook, including the minutes of the Federal Open Market Committee today, and Fed Chairwoman Janet Yellen’s speech at Jackson Hole, Wyo., on Friday. The Fed reduced monthly bond purchases by $10 billion for a sixth consecutive meeting last month to $25 billion. Chair Janet Yellen is scheduled to deliver a speech at an annual symposium in Jackson Hole, Wyoming, where the focus of the three-day meeting of central bankers and economists beginning Aug. 21 will be on the labor market. ECB President Mario Draghi is also among the speakers. The market will also be looking forward to the jobless claims and July existing home sales data out on Thursday. The Dollar Index, which tracks the performance of the U.S Dollar versus a basket of six other major currencies, was up by 0.369% at 81.872. xmindofx/market-news
Posted on: Wed, 20 Aug 2014 12:45:08 +0000
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