The euro slipped in early deals this morning as the dollar was boosted by last night's decision by the Federal Reserve to hold rates and relatively upbeat accompanying comments. At 0845, the euro stood at USD1.1235. "The tone of the comments cheered the dollar, which pushed higher against other majors, largely in response to gains in the equity market," said Geraldine Concagh, senior economist with AIB Global Treasury. "The euro has opened at its lowest level for the week and looks set for a move to USD1.12. There was talk that the BoJ intervened against the yen after the Fed's decision," she added.
With the Fed meeting out of the way, the focus will now shift to the week's line-up of key US data, starting with today's retail sales report for July, which is due for release at 1.30pm. "Evidence that the consumer continues to provide support to the economy should be dollar positive and could even tempt a move from recent tight ranges," said Concagh.
Higher than expected UK inflation had minimal impact, with sterling looking to the dollar and euro for direction. Sterling has edged up against the euro from yesterday's close, leaving the single currency at STG0.7031. //www.fxcentre.com