U.S. Dollar Slips After Fed; China CPI in Focus
The U.S. dollar slipped on Thursday in Asia after the Federal Reserve indicated in the minutes of its December meeting that it was willing to hold off on rate hikes amid concerns about global growth and subdued inflation.
Fed members indicated they could afford to be "patient" about future rate hikes, citing a list of concerns including volatility in financial markets, slowing global growth and muted inflation pressures.
The U.S. dollar index that tracks the greenback against a basket of other currencies slipped 0.1% at 94.718 by 12:18 AM ET (05:18 GMT).
"The Fed has acknowledged market concerns with its language. The markets are clearly reading into this as a more accommodative stance," said Michael McCarthy, chief markets strategist at CMC Markets.
"Optimism on US-China trade talks is also bolstering risk sentiment...the sharp rally in oil prices is also indicative of the fact that global growth fears were probably overdone," added McCarthy.
China’s Commerce Ministry said in a Thursday morning statement the trade talks with the U.S. that ended yesterday were extensive and detailed, and that both sides agreed to continue to keep in close contact.
The U.S. side also issued a statement earlier in the day. According to the report, China had pledged to purchase "a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.”
The USD/CNY pair traded 0.4% lower to 6.7910 as the People's Bank of China (PBOC) set the yuan reference rate at 6.8160 vs the previous day's fix of 6.8526.
The producer price index and the consumer price index took centre stage as they both grew less than expected in December, official data showed on Thursday in Asia.
The producer price index in December, which measures price increases before they reach the consumer, was up 0.9% from a year ago, lower than the expected 1.6%, according to the latest data published by the National Bureau of Statistics.
Factory prices have now decelerated for six months in a row, the South China Morning Post reported.
The consumer price Index, a gauge of prices for goods and services, rose 1.9% year on year in December, compared to 2.2% in November.
The AUD/USD rebounded 0.2% after trading lower earlier in the day on the below-forecast China CPI and PPI readings.