Daily Afternoon Report 26.07.2017

The dollar held steady against the other major currencies on Wednesday, after the release of disappointing U.S. housing sector data and as investors awaited the Federal Reserve’s monthly policy decision due later in the day.

The U.S. Commerce Department said new home sales inched up by 0.8% to 610,000 units last month, compared to expectations for a gain of 1.4% to 615,000. New home sales in May were revised down to 605,000 units from a previously reported 610,000 units.

Investors were hoping that the Fed’s rate statement will reveal more about policy plans for the second half of the year, with markets paying close attention to details of when and how the Fed will start reducing its $4.5 trillion balance sheet.

Doubts over the Feds plans for a third rate hike this year have recently weighed on the greenback.

GBPUSD edged up 0.17%, erasing earlier losses, after the U.K. Office for National Statistics said gross domestic product rose by 0.3% in the three months to June, from 0.2% growth in the first three months of the year. Economists had forecast growth of 0.3%.

On a year-over-year basis the economy expanded by 1.7% from 2.0% in the first quarter, also in line with forecasts.

Earlier Wednesday, the Australian Bureau of Statistics said its consumer price index rose 0.2% in the second quarter, disappointing expectations for an increase of 0.4%.

Year-on-year, consumer prices increased by 1.9%, compared to expectations for a 2.2% climb.

At the same time. Statistics New Zealand said the trade surplus grew to NZ$242 million last month from a revised surplus of NZ$74 million in May. Analysts had expected the trade surplus to hit NZ$100 million in June.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 93.99, not far from Tuesday’s 13-month trough of 93.46.