The dollar strengthened against its peers today following the release of varied US economic data as the market eagerly awaited the Federal Reserve’s latest policy statement today.  The US Commerce Department released data which revealed that housing starts climbed 5.2% from a total of 1.120 million units in January to 1.178 million units in February.  Experts forecast an increase of 4.6% to total 1.150 million units in February.  The US consumer price index dropped 0.2% in February in line with forecasts.  US industrial production declined 0.5% in February compounding forecasts for a decrease of 0.2%. 

Leading up the Fed’s statement the US dollar index was trading at 97.01 up 0.36% which was its highest level since March 10.  Following the Fed’s announcement the US dollar index was trading at 95.78 down 0.91% at new 1 month lows.  As was widely expected the Federal Reserve left its benchmark interest rate unchanged for the 2nd time in a row after ending its 7 year zero interest rate policy in December. 

The euro strengthened against the dollar following the Fed’s announcement with the pair up 0.8% trading at 1.1197 off its session high of 1.1200 after having come off its session low of 1.1057 reached earlier in the day.  The euro had held its ground trading at 1.1100 as the market prepared for the Fed’s announcement.   

The pound strengthened against the dollar following the Fed’s announcement with the pair up 0.5% trading at 1.4222 off its session high of 1.4246 after having come off its session low of 1.4052 reached earlier in the day.  The pound had weakened earlier in the session after data released by the UK Office for National Statistics revealed that UK’s unemployment rate remained at 5.1% in the 4th quarter matching expectations.  UK claimant count dropped by 18,000 in February while experts forecast a decrease of 9,100 individuals after a decline of 28,400 in January.  UK’s average earnings index was up by 2.1% in the 4th quarter. 

The yen strengthened against the dollar following the Fed’s announcement with the pair down 0.27% trading at 112.84 off its session low of 112.78 after having come off its session high of 113.81 reached earlier in the day.  The yen had been pressured to the downside ahead of the Fed’s policy statement.     

The Australian, New Zealand and Canadian dollars strengthened against the greenback following the Fed’s announcement.  The Aussie surged 1.13% against the dollar with the pair trading at 0.7543 off its session high of 0.7552 after having come off its session low of 0.7414 reached earlier in the day.  The kiwi dollar rallied against the greenback with the pair up 1.86% trading at session highs of 0.6724 after having come off its session low of 0.6575 reached earlier in the day.  The loonie climbed 1.77% against the greenback with the pair trading at 1.3124 off its session low of 1.3112 after having come off its session high of 1.3404 reached earlier in the day. 

Prior to the Fed’s policy statement Statistics Canada released data which revealed that manufacturing sales for Canada rose by 2.3% in January surpassing forecasts of a 0.5% increase following a December increase of 1.4%.  Commodity associated currencies were also supported by a rally in oil prices after news of an agreement between OPEC and non-OPEC producers to meet next month to discuss plans to cap output levels hit the airwaves.  Brent oil was up 3.92% trading at $40.26 per barrel.

Disclaimer:  This information has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.