Forex – Dollar Edges Higher in Quiet Post-Christmas Trade

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Investing.com – The U.S. dollar edged higher against the other major currencies on Wednesday, with activity likely to stay subdued as many global markets remained closed for the Christmas holiday.

Markets in Britain, Germany and Hong Kong are all closed, resulting in muted trading volumes.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.2% at 96.20 by 3:55AM ET (08:55 GMT).

Market focus will stay attuned to developments out of Washington DC amid the partial U.S. government shutdown and signs of confrontation between the White House and the Federal Reserve.

President Donald Trump on Tuesday said the partial government shutdown was going to last until his demand for funds to build a wall on the U.S.-Mexico border is met.

Building a wall along the border with Mexico to keep migrants from entering the country illegally was a central plank of Trump’s presidential campaign, but Democrats are vehemently opposed and have rejected his funding request of $5 billion.

Meanwhile, Trump continued his spate of open criticism of the Fed, saying the central bank was hiking interest rates too quickly.

“They’re raising interest rates too fast because they think the economy is so good. But I think that they will get it pretty soon,” Trump told reporters in the Oval Office on Tuesday.

The Fed lifted rates for the fourth time this year last week and kept most of its guidance for additional hikes over the next two years.

However, this month’s steep declines in U.S. stock markets have sparked speculation the U.S. central bank may pause its rate-hiking cycle in 2019.

Elsewhere, the greenback was stronger against the yen, with USD/JPY gaining 0.2% to trade at 110.52. The dollar has struggled particularly against the yen, losing ground for eight straight sessions leading up to Wednesday.

Meanwhile, the euro held steady, with EUR/USD at 1.1390.

The pound was also little changed, with GBP/USD at 1.2690.

— Reuters contributed to this report

Read more at : https://www.investing.com/news/forex-news/forex–dollar-edges-higher-in-quiet-postchristmas-trade-1730650

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