The US dollar struggled throughout yesterday, as the falling oil prices continued to take precedence for investors. As the decline stretched further, investors were seeking the safest havens for their assets, moving the demand from the dollar to the Japanese yen. As such, the dollar fell against the majority of its peers, while the Federal Reserve started their two day meeting.
In terms of other data releases, the building permits were as expected, and the manufacturing Purchasing Managers’ Index (PMI) slightly behind expectations, but these ultimately had little impact given the wider events.
Today, the results of the Federal Reserve meeting are sure to be of particular interest to investors, as they look for any clues as to the timescales for interest rate rises. The official line recently has been that they will not raise them for a ‘considerable time’, but any deviation from this phrasing will likely have an impact on the currency’s performance. This is due this evening, but before this there is key inflation data in the shape of the Consumer Price Index (CPI). This could help the currency during the day should it come out positive, but its longer term prospects are likely to be of higher interest.