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The dollar traded 0.1 percent from the least in five weeks against the euro after the Federal Reserve extended its pledge to keep interest rates low until late 2014. Economic conditions will likely “warrant exceptionally low levels for the federal funds rate at least through late 2014,” the Federal Open Market Committee said in a statement released in Washington yesterday. The Fed had previously pledged to keep its rate target in place until mid-2013. The central bank also lowered its forecast for economic growth this year to a range of 2.2 percent to 2.7 percent, down from a projection of 2.5 percent to 2.9 percent in November. U.S. gross domestic product increased at a 3 percent annual rate in the fourth quarter, according to the median forecast of economists in a Bloomberg News survey before the Commerce Department’s releases the data tomorrow. That compares with a 1.8 percent advance in the previous three-month period.
New Zealand’s dollar maintained a four-day gain even after the nation’s central bank held its key interest rate at a record low.
Reserve Bank of New Zealand Governor Alan Bollard said today it is “prudent” for the central bank to keep interest rates at record low 2.5 percent.
Demand for the 17-nation euro was limited before talks on a Greek debt swap resume.
EUR/USD: during the Asian session the pair was in a range $1.3090-$1.3010.
GBP/USD: during the Asian session the pair was in a range $1.5650-$1.5660.
USD/JPY: during the Asian session the pair continued yesterday's decrease.
On Thursday European data starts at 0710GMT with the GfK consumer confidence data from Germany, while France data at 0745GMT includes consumer confidence and also the quarterly industry survey. At 0800GMT, World Trade Organization Director General Pascal Lamy becomes the first main speaker out of Davos for Thursday, followed at 1030GMT by UK Prime Minister David Cameron. At 1300GMT,
German Chancellor Angela Merkel and Spanish Prime Minister Mariano Rajoy give a joint press conference after their meeting in Berlin. UK
data at 1100GMT sees the CBI Distributive Trades Survey. US data starts at 1330GMT with both the weekly Jobless Claims and also Durable Goods orders. The weekly EIA Natural Gas Stocks data is then due at 1530GMT, followed at 1600GMT by Kansas City Fed Production data and later, at 2130GMT by M2 Money Supply data.
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