The U.S. Dollar drifted lower against most of its major rivals on Wednesday, with traders reacting to the monetary policy announcement from the Bank of Canada, and looking ahead to the policy statements from the Bank of Japan and the European Central Bank.
The Canadian central bank maintained its benchmark rate at 0.25%, as expected, but terminated the quantitative easing program, reflecting the progress in the economic recovery from the crisis.
The bank said it is now moving into the reinvestment phase, during which it will purchase Government of Canada bonds to replace maturing bonds.
In U.S. economic news, Data released by the Commerce Department showed durable goods orders pulled back by much less than expected in the month of September, falling by 0.4% after jumping by a downwardly revised 1.3% in August.
Economists had expected durable goods orders to slump by 1.1% compared to the 1.8% spike that had been reported for the previous month.
The dollar index dropped to 93.69 by mid-morning, and after recovering to 93.93 around noon, slipped again before advancing to 93.89, down just marginally from the previous close.
Against the Euro, the dollar is trading at 1.1602, down slightly from Tuesday’s close.
The Pound Sterling is weak against the dollar, fetching $1.3739 a unit. U.K. Chancellor Rishi Sunak announced public spending would increase by a massive 150 billion pounds in an effort to underpin a strong economic recovery after the crisis caused by the coronavirus pandemic.
Sunak also confirmed a rise in the U.K.’s national living wage from ?8.91 per hour to ?9.50, which is set to come into effect from April 1.
The yen firmed to 113.83 a dollar, gaining from 114.16, ahead of monetary policy announcement.
Against the Aussie, the dollar is at 0.7519, easing from 0.7500. Australia’s core inflation accelerated to 2.1% in the third quarter, from 1.6% in the second quarter. The expected rate was 1.8%. This was the strongest inflation since 2015.
The Swiss franc is at 0.9182 against the dollar, gaining from 0.9199.
The dollar is trading at C$1.2360, down from C$1.2390 after the Bank of Canada left its interest rate unchanged and terminated the quantitative easing program, reflecting the progress in the economic recovery from the crisis.