The US dollar had a disappointing day, as poor data and sentiment cooled speculation over interest rate rises. As the Federal Reserve started their two-day meeting, the country released a Producers’ Price Index as a measure of inflation. The figure for this fell unexpectedly, starting off the loss of strength from the US currency. Following this, the general feeling among economists was that any interest raises would only be gradual, shading sentiment with negativity. Later in the evening, activity in China saw the dollar weaken further.
Today is the most important day of the week for the US, with both data and guidance from the Federal Reserve due. Inflation takes the main stage in the early afternoon, in the form of the Consumer Price Index. The evening’s focus will be on the US Federal Reserve, as it releases its economic projections and funds rate, with an accompanying statement and press conference. This will be a prime opportunity for investors to gauge the future prospects of the currency – they will look for any indication and clues as to the possibilities of such a decision.