Daily Afternoon Report 21/09/2015

Daily Afternoon Report 21/09/2015

The euro slid to session lows against the firmer dollar today as the mood in markets turned more positive despite ongoing concerns over the outlook for global growth following the Federal Reserve’s decision last week not to raise interest rates.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.3% to 95.65, recovering from Friday’s three-week lows of 94.19.

The dollar strengthened and European equities moved higher despite a shaky start to Monday’s session and oil prices also climbed. But investors remained cautious after the Fed held interest rates steady on Thursday, amid concerns over soft inflation and the effects of recent market volatility on the U.S. economy. While the decision was not completely unexpected the Fed’s concerns over the uncertain outlook for global growth rattled financial markets and pressured the dollar lower.

Investors were looking ahead to Chinese manufacturing data on Wednesday, as well as surveys of the eurozone private sector for fresh indications on the condition of the global economy.

Elsewhere, the euro’s gains were held in check after European Central Bank Chief Economist Peter Praet reiterated Saturday that the bank is prepared to enlarge its monetary stimulus program if necessary to combat risks from global economic turbulence.

Earlier this month the ECB cut its forecasts for growth and inflation and indicated that its trillion-euro bond-buying program could be scaled up.