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Dollar Edges Higher as Stock Markets Rebound

10/17/2018, 6:16:59 PMBasics of Trading
Dollar Edges Higher as Stock Markets Rebound

The dollar edged higher against a currency basket on Wednesday, as market sentiment was boosted by strong earnings reports, dampening demand for safe haven assets.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.13% to 94.90 by 03:53 AM ET (07:53 AM GMT).

European equities joined in a global stock rally as markets shook off last week’s worries, with Wall Street posting its strongest gains in almost seven months on Tuesday boosted by upbeat earnings.

The solid earnings reports indicated that the U.S. economic recovery is on track despite concerns over rising interest rates and trade war tensions.

The dollar was steady against the yen, with USD/JPY at 112.28.

The euro was a touch lower against the dollar, with EUR/USD sliding 0.12% to 1.1558, off Tuesday’s two-week highs of 1.1620.

The pound was also slightly lower, with GBP/USD dipping 0.11% to 1.3168.

Sterling gained ground on Tuesday after strong wage growth data, but uncertainty over whether Brexit negotiations will lead to a deal saw it pare back gains.

Markets will be looking for clues on the future path of interest rates from the minutes of the Federal Reserve’s September meeting later in the day. The Fed hiked rates for the third time this year last month and is widely expected to raise rates again in December and beyond.

On Tuesday, President Donald Trump renewed his criticism of the Fed, describing the U.S. central bank as his “biggest threat” because it was raising rates too quickly.

Last week, Trump blamed an “out of control” Fed for Wall Street’s worst sell-off since February.