Dollar subdued as Fed Beige Book indicates modest growth

The dollar is subdued in forex markets this morning (January 17th) after the Federal Reserve's (Fed) Beige Book indicated a rosier outlook for the US economy.

According to the report – which is compiled using data from all 12 Fed districts – economic activity picked up in November and December 2012 thanks to a modest rise in retail sales.

However, the impact of the fiscal cliff threat on confidence levels had a lasting effect, while manufacturing remained sluggish.

The Beige Book said: "Reports from the 12 Fed districts indicated that economic activity has expanded since the previous Beige Book report, with all 12 districts characterising the pace of growth as either modest or moderate."

Housing also strengthened, while construction picked up in 11 of the 12 zones, while tourism is continuing to do well, with eight regions saying holiday spending held its ground or grew.

At 08:30 GMT, the dollar rose by 0.1 per cent in trading with the pound to $1 buying £0.625, while it was stable versus the euro at €0.752.

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