2020.01.2920:46:00UTC+00Dollar Stays Firm, Gains Against Rivals

The U.S. dollar remained steady and stayed stronger against most major currencies on Wednesday, reacting to the latest batch of economic data and the Federal Reserve's monetary policy announcement.

Amid lingering worries about the potential impact of the coronavirus on the global economy, the dollar retained its safe-haven appeal.

After exhibiting strength early on in the session, the dollar stayed sideways for quite sometime before slipping into negative territory after the central bank's policy statement. It subsequently rebounded to move marginally higher.

The dollar index, which rose to 98.19 earlier in the day and slipped to 97.94 later on, was last seen at 98.10, up 0.8% from previous close.

Against the Euro, the dollar strengthened to $1.1006, gaining about 0.15%.

Against Pound Sterling, the dollar advanced to $1.3015. and against the Japanese yen, it was down marginally at 109.08 yen.

The Aussie was lower against the dollar at 0.6751. The dollar gained against Swiss franc and Loonie as well, strengthening to 0.9740 and 1.3203, respectively.

As expected, the Federal Reserve today left interest rates unchanged following the conclusion of its two-day monetary policy meeting.

The Fed decided to maintain the target range for the federal funds rate at 1.5 to 1.75%, keeping rates unchanged for the second straight meeting after three straight quarter-point rate cuts.

The accompanying statement was largely unchanged from last month, with the Fed noting that recent data indicates the labor market remains strong and that economic activity has been rising at a moderate rate.

The central bank did describe household spending as rising at a "moderate pace" compared to last month's description of spending as rising at a "strong pace."

The Fed also reiterated that business fixed investment and exports remain weak and that the annual rate of inflation continues to run below its 2% target.

The central bank said it views the current stance of monetary policy as appropriate to supporting sustained expansion of economic activity, strong labor market conditions, and inflation returning to 2%. It added that it will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path for rates.

According to a report released by the National Association of Realtors on Wednesday, pending home sales in the U.S. unexpectedly showed a sharp pullback in the month of December. NAR said its pending home sales index plunged by 4.9% in December after jumping by 1.2% in November. Economists had expected pending home sales to rise by 0.5%.