U.S Dollar Sways in Value as the Federal Reserve Plans to Slow Stimulus in September

U.S Dollar Sways in Value as the Federal Reserve to Slow Stimulus in SeptemberBetween Monday August 19th and Friday August 23rd, the U.S swayed in value against its major comparisons after the Monday ending of the Federal Reserve gathering with plans to slow the stimulus in September.

Announcements came after the finale of the Federal annual retreat held in Jackson Hole Wyoming that the Federal Reserve is currently planning to slow down the stimulus efforts this September. Banks attending the retreat are requesting a return to conventional monetary policy and the Federal Reserve intends to reduce efforts in response.

Currently the Federal Reserve purchases close to $85 billion monthly in assets in the effort to aid economic growth. Many others in attendance at the conference however, have requested that the central bank delay slowing the stimulus until later in 2013 as concerned are raised for the increasing surge in interest rates and other challenges still facing the economy. A number of struggles which will continue into September could increase further if the Reserve slows the stimulus now.

The ICE dollar index felt a slight drop to 81.360 from its previous 81.366 standing on Friday in the U.S when compared to its six counterparts. According to sources the index hit a peek of 81.39 early Monday after a 0.2% gain the previous week. The WSJ index reported losses, down from 73.86 to 73.83.

The fall in currency is attributed to recent activity in the real estate district acting as an indication that the economy is in need of more assistance from the Federal Reserve, not a decrease. The sales of new homes nationwide fell 13.4% for the month of July, while the adjusted annual rate came in over 100,000 under experts predictions. US Treasury yields also experienced significant losses as a result.

While experts state that this previous week is not the best gauge for decision making as to whether or not the Federal Reserve should increase, continue or slow stimulus efforts, more reports for the month of July are scheduled to release in the upcoming weeks that will most defiantly shed more light on the topic. Experts are also predicting that in many areas of business and commerce, numbers will see higher declines than originally predicted.

The forecast for July Durable-goods is expected to be an overdue decline of approximately 5% after a strong April to June report. The consumer spending and confidence reports are scheduled to release this upcoming Friday and predictions state that numbers won’t be earning consumers any gold stars.

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About the author

Rob is a analyst and reporter covering stocks and business news.