Dollar extends post-FOMC rally before paring gains in NY afternoon: Sept 23, 2016

Market Review - 22/09/2016   21:55GMT  

Dollar extends post-FOMC rally before paring gains in NY afternoon

The greenback fell against majority of its peers except the Japanese yen on Thursday as the Federal Reserve's decision to not hike rates and lower its longer-term rate view continued to weigh on the buck. 

Versus the Japanese yen, although dollar dropped to session low at 100.10, price pared its losses and staged a short-covering rally to 100.87 in Europe, then marginally higher to an intra-day high at 100.92 in New York afternoon before stabilising. 

The single currency traded with a firm bias in Asia and rallied to 1.1248 in Europe on dollar's broad-based weakness following Fed's decision to not act. Euro ratcheted higher to an intra-day high at 1.1257 in New York morning before retreating on profit-taking, price fell back to 1.1200 before moving narrowly near the close.. 

The British pound also traded with a firm bias in Asia and gained in tandem with euro to 1.3088 in European morning. Renewed buying at 1.3048 lifted the pair and cable rose to an intra-day high at 1.3121 in New York morning before retreating on profit-taking. 

In other news, ECB's Knot said 'financial stability n price stability are aligned on a sufficiently long horizon; ECB shud use medium term target sufficiently flexibly.' 

On the data front, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending September 17 decreased by 8,000 to a seasonally adjusted 252,000 from the previous week's total of 260,000. 

Data to be released on Friday: 

Japan manufacturing PMI, France GDP, manufacturing PMI, service PMI, manufacturing PMI, service PMI, Germany manufacturing PMI, service PMI, Eurozone manufacturing PMI, service PMI, Canada CPI, retail sales and U.S. manufacturing PMI.