Aided by a fall in the price of oil, which is trading near $119 a barrel, the U.S. Dollar reached a 6-week high versus the Euro, while investors wait for an announcement on the direction of interest rates, expected to be released by the Federal Reserve some time today. It is anticipated that the Federal Reserve will maintain the 2% interest rate, as the sluggish economy is tempering the need to adjust interest rates upward in an effort to tackle inflationary pressure.
Investors are hoping that the FOMC (Federal Open Market Committee) will release an aggressively worded statement simultaneous with the interest rate announcement, which would reiterate the belief that the threats to economic growth have somewhat diminished in light of recently released better-than-expected data from the United States.
At 11:30 a.m. GMT, the Euro fell to $1.5475 from $1.5501 in early morning trading. At the same time, the Pound Sterling traded at $1.9530 versus the U.S. Dollar, down slightly from $1.9551 at 08:41 a.m. GMT. The slight drop in the Pound Sterling is attributed to a larger than expected decrease in June’s manufacturing and industrial production, which raised the possibility of a downward adjustment to second quarter GDP figures in the UK.