USD helped by oil prices before Fed rate decision

Story link: USD helped by oil prices before Fed rate decision

The US dollar was about even in relation to the euro and up slightly against the yen on Wednesday ahead of the latest decision on US interest rates by the Federal Reserve.

A decline in crude oil prices after gains in US inventories also helped the dollar, but a decline in new home sales in May and a decline in durable goods orders in the US in the same month made it less likely that the Fed will hike interest rates in the next few months.

Near midday in New York, the dollar traded at $1.5567 to the euro while it took ¥108.3050 to buy a dollar.

At the same time, European Central Bank president Jean-Claude Trichet again hinted, this time in comments to the European Parliament, that Eurozone interest rates will go up soon in order to fight inflation.

The euro was up in relation to the yen, which traded at ¥168.6038 to the shared currency.

The South African rand was stronger against all major currencies after new data showing that inflation is growing there faster than it has in five years, sparking speculation that interest rates there could go up.

The rand traded at $7.8955 to the US dollar and at $12.296 to the euro at around noon in New York, while it took ¥13.706 to buy a rand.

The Australian and New Zealand dollars both gained on the greenback on the possibility that the Federal Reserve will put off raising US interest rates for awhile yet.

It took 95.41 cents US to buy an Australian dollar while the New Zealand dollar was worth 75.61 cents US.

The Aussie was also up versus the yen at ¥103.3480 while the kiwi also rose slightly against the Japanese currency, to ¥81.887.