US Dollar Mixed As The Weekend Approaches

Washington (Oct 9)  The dollar is losing ground against the Euro Friday afternoon, but is posting modest gains against both the British pound and the Japanese Yen. The question of when the Federal Reserve will begin to hike interest rates has been a topic of great debate in recent days. Yesterday's Fed minutes were viewed as dovish, leading many to speculate that the Fed may decide to keep rates unchanged until the start of the new year or perhaps beyond. Meanwhile,  Dennis Lockhart  made statements to the contrary this morning.

The minutes showed that Fed members were concerned about global growth risks and decided it was prudent to wait for additional information before raising interest rates. Combined with recent jobs and trade data, the minutes helped reinforce the view that the Fed will not raise rates later this month and may delay its first rate hike into next year.

However,  Federal Reserve Bank of Atlanta  President  Dennis Lockhart  said Friday that the Federal Reserve remains on track to raise interest rates before year's end. Lockhart feels the US economy has enough momentum to withstand  China's  slowdown and gradual interest rate hikes.

Import prices in the US saw a modest decrease in the month of September, according to a report released by the  Labor Department  on Friday, with a drop in non-fuel prices offsetting a rebound in fuel prices.

The report said import prices edged down by 0.1% in September after tumbling by a revised 1.6% in August. Economists had expected import prices to fall by 0.4%.

The report also said export prices dropped by 0.7% in September after slumping 1.4% in August. The decrease was much steeper than the 0.2% drop expected by economists.

With an increase in inventories of durable goods partly offset by a drop in inventories of non-durable goods, the  Commerce Department  released a report on Friday showing only a slight uptick in US wholesale inventories in the month of August.

 The Commerce Department  said wholesale inventories inched up by 0.1% in August following a revised 0.3% drop in July. The modest increase in inventories matched economist estimates.

The dollar has dropped to a 3-week low of  USD1.1365  against the Euro Friday afternoon, from around  USD1.1280  this morning.

French industrial and manufacturing output expanded at the fastest pace in more than two years in August, data from the statistical office Insee showed Friday.

Industrial production grew 1.6% on a monthly basis in August, reversing a 1.1% fall in July. It was the fastest growth since  April 2013  , when it climbed 2.1%. Growth also exceeded a 0.6% rise forecast by economists.

The buck hit over a 2-week low of  USD1.5383  against the pound sterling early Friday, but has since bounced back to around  USD1.5330  .

The  UK  visible trade deficit narrowed in August as car exports increased from July, the  Office for National Statistics  reported Friday. The deficit on trade in goods fell to  GBP 11.1 billion  from  GBP 12.2 billion  in July. It was expected to fall to  GBP 9.9 billion  .

British construction output unexpectedly declined for a second straight month in August at its fastest pace since late 2012, figures from the  Office for National Statistics  showed Friday. Construction output dropped 4.3% from July, when it fell 1%. Economists had expected a 1% gain. The pace of decline was the fastest since  December 2012  , when output decreased 5.1%.

The greenback has climbed to  Y120.265  against the Japanese Yen this afternoon, from around  Y119.950  this morning.

Source: AllianceNews