U.S. Dollar Trades Higher Against Majors
February 19 2018 - 1:29AM
RTTF2
The U.S. dollar traded higher against its major counterparts in
early European deals on Monday, as investors believe that its
recent sell-off was overdone.
Speculation for monetary policy tightening outside the U.S.,
which would narrow the divergence between the Federal Reserve and
other central banks, has reduced the dollar's yield advantage this
year.
The currency clawed back some of its losses, buoyed by strong
economic data released on Friday.
The University of Michigan's consumer sentiment index showed a
significant improvement in February, while housing starts and
building permits rose more than forecast in January.
The Federal Reserve will release minutes of the January policy
meeting on Wednesday, which would help gauge the pace of potential
interest rate hikes this year.
Fed policymakers scheduled to speak include New York Fed
President William Dudley and Atlanta Fed President Raphael Bostic
on Thursday, as well as Cleveland Fed President Loretta Mester and
San Francisco Fed John Williams on Friday.
The greenback advanced to a 5-day high of 1.3993 against the
pound, compared to 1.4033 hit late New York Friday. If the
greenback extends rise, 1.35 is seen as its next resistance
level.
The greenback that closed Friday's trading at 1.2409 against the
euro climbed to a 5-day high of 1.2388. The next possible
resistance for the greenback is seen around the 1.22 mark.
Data from the European Central Bank showed that the euro area
current account surplus decreased at the end of the year.
The current account surplus fell to a 6-month low of EUR 29.9
billion in December from EUR 35 billion in November.
The greenback firmed to a 4-day high of 106.66 against the yen
and held steady thereafter. At last week's close, the pair was
valued at 106.27. On the upside, 110.00 is likely seen as the next
resistance for the greenback.
Data from the Ministry of Finance showed that Japan logged a
merchandise trade deficit of 943.417 billion yen in January.
That exceeded forecasts for a shortfall of 1,003.6 billion yen
following the 358.7 billion yen deficit in December.
The greenback strengthened to a 5-day high of 0.9300 against the
franc from last week's closing value of 0.9271. The greenback is
seen finding resistance around the 0.95 level.
The greenback bounced off to 1.2565 against the loonie and
0.7375 against the kiwi, from its early lows of 1.2528 and 0.7410,
respectively. Further uptrend for the greenback is likely to see it
finding resistance around 1.28 against the loonie and 1.72 against
the kiwi.
The U.S. market remain shut for Presidents Day.
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