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As
expected, the Fed gave no clear indication on timing but what it
did say was enough to encourage those analysts who have been
sticking with forecasts for a September rate rise even as the
market priced them out in recent weeks.
In morning trade in Europe, the euro was down a cent against the
dollar compared with levels seen before the Fed made its monthly
policy statement on Wednesday, falling back to around $1.0950 <EUR=EBS>,
its lowest since last Friday.
The dollar index rose a further 0.4 percent from the U.S. close
to 97.320. <.DXY>. It was also 0.3 percent higher at 124.35 yen.
<JPY=>
"The fact they weren't worried about anything else outside the
U.S. economy -- China or any of the other risks out there -- has
allowed people to move on," Bank of New York Mellon head of
global research Simon Derrick said.
He said that pointed to further falls in commodities prices and
currencies closely linked to them. The Canadian dollar <CAD=>
and Norwegian crown <NOK=> were down 0.2 percent, and the New
Zealand dollar 0.8 percent. <NZD=>
"It seems unlikely that the outlook for the Aussie, kiwi, crown
or Canadian dollar will brighten up going into a Fed lift-off in
September," said Valentin Marinov, head of G10 currency research
at French bank Credit Agricole.
"Our analysis suggests that NOK and CAD should be more
resilient than AUD and NZD to any risk sell-off in response to a
Fed lift-off."
Second quarter U.S. gross domestic product data due later in the
session could spur bets that the Fed will move in September.
"We're seeing some pretty good follow-through, in terms of U.S.
dollar-buying," RBC Capital Markets' senior currency strategist
Sue Trinh said.
"It's not a done deal, but we are still of the view that a
September lift-off is on the cards, contingent on the view that
the data out of the U.S. continues to be firm."
One other mover was the Swedish crown, which rose around half a
percent against the euro <EURSEK=> on a better-than-expected
reading of second-quarter GDP numbers.
The Swedish economy, which had been struggling against the
threat of deflation, expanded by 3 percent year on year, the
data showed. By 1052 GMT, the crown, which hit its lowest since
February on Wednesday, was up 0.2 percent at 9.4550 crowns.
(Additional reporting by Lisa Twaronite in TOKYO; Editing by
Catherine Evans)
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