The US dollar index increased around 0.15 percent after the release of the “beige book” report from the Federal Reserve in yesterday’s trading session. The report compiles information from business contacts in each of the central bank’s 12 districts. This release showed waning optimism among U.S. businesses as they face the government shutdown, trade disputes, higher borrowing costs, and a volatile stock market. It is normal to see that the American economy continues to grow, but some firms are pulling back on planned investments for 2019, according to the Fed. On top of that, the Fed linked rising student debt to a drop in home ownership among young Americans. This, along with the flight of college graduates from rural areas, were two significant shifts that have helped reshape the U.S. economy.
In contrast, some US dollar pairs were trading at new highs, especially Emerging Market currencies such as the Thai Baht, South African Rand, Chilean Peso, and Mexican Pesos. Fed policy is the main reason for the pause in policy normalization.