U.S. Dollar Declines Ahead Of Yellen's Speech
August 25 2016 - 11:45PM
RTTF2
The U.S. dollar fell against its major counterparts in
pre-European trading on Friday, as investors await rate hike clues
from Fed chair Janet Yellen in her speech in Jackson Hole symposium
later today.
Investors are looking for hints about trajectory of interest
rate hike from Yellen's address against the backdrop of improving
U.S. data, hawkish comments from several Fed officials and looming
global risks to the world's largest economy.
Commerce department will release second estimate of U.S. second
quarter GDP data at 8:30 am ET. The economy is forecast to expand
at an annualised pace of 1.1 percent, slightly slower than the
initial estimate of 1.2 percent.
At 10:00 am ET, University of Michigan's final consumer
sentiment for August is set for release. The index is expected to
revise upward to 90.8, from preliminary reading of 90.4.
The currency has been trading in a negative territory in Asian
deals.
The greenback fell to a 2-day low of 1.1308 against the euro at
2:15 am ET, compared to Thursday's closing value of 1.1279. The
greenback is seen finding support around the 1.15 mark.
Survey results from the market research group GfK showed that
German consumer sentiment is set to develop positively in September
as Brexit vote seems to have caused only temporary uncertainty.
The forward-looking consumer climate index rose to 10.2 in
September from 10.0 in August. The score was forecast to remain
unchanged at 10.0 in September.
The greenback reversed from an early high of 100.59 against the
yen and remained lower at 100.45. The next possible support for the
greenback may be located around the 97.5 region.
Data from the Ministry of Internal Affairs and Communications
showed that Japan's consumer prices fell 0.4 percent on year in
July - in line with expectations and unchanged from June's annual
reading.
Core CPI, which excludes volatile food costs, slid 0.5 percent
on year - missing forecasts for -0.4 percent, which would have been
unchanged.
The greenback retreated to 0.9648 against the franc and 1.3232
against the pound, from its early highs of 0.9683 and 1.3185,
respectively. The greenback is seen finding support around 0.95
against the franc and 1.35 against the pound.
The greenback that rose to 0.7290 against the kiwi at 5:00 pm ET
reversed direction and edged down to 0.7326. If the greenback
extends decline, 0.75 is possibly seen as its next support
level.
The greenback slid to 3-day lows of 0.7647 against the aussie
and 1.2892 against the loonie, from its previous highs of 0.7615
and 1.2922, respectively. Continuation of the greenback's downtrend
may see it challenging support around 0.78 against the aussie and
1.27 against the loonie.
Looking ahead, U.K. preliminary second quarter GDP data is due
in the European session.
In the New York session, the second estimate of U.S. second
quarter GDP data and the University of Michigan's final consumer
sentiment index for August are set for release.
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