U.S. Dollar Weakens Against Most Majors
July 17 2017 - 6:24AM
RTTF2
The U.S. dollar declined against its most major opponents in
European trading on Monday, weighed by lowering expectations for
another Fed rate hike this year following weak inflation data
released last week.
The consumer price index was unchanged in June, contradicting
expectations for an uptick of 0.1 percent, according to a report by
the Labor Department.
The CPI data coupled with weak retail sales and consumer
sentiment figures dimmed prospects for a Fed rate hike later this
year.
Odds for a December rate hike this year have eased to 45 percent
after the release of data, from 52 percent before the data, CME
Group's FedWatch tool showed.
Data from the Federal Reserve Bank of New York showed that
activity in the New York manufacturing sector grew at a notably
slower pace in the month of July.
The New York Fed said its general business conditions index
dropped to 9.8 in July from '19.8 in June, although a positive
reading still indicates growth. Economists had expected the index
to fall to 15.0
Investors await reports on import and export prices, homebuilder
confidence, housing starts, and Philadelphia-area manufacturing
activity due this week for more clues about the pace of economic
growth.
The greenback showed mixed performance in the Asian session.
While the currency rose against the franc and the yen, it fell
against the euro and the pound.
The greenback fell to a 10-day low of 0.9595 against the franc,
from a high of 0.9659 hit at 3:15 am ET. If the greenback-franc
pair extends slide, 0.94 is likely seen as its next support
level.
Reversing from an early high of 112.77 against the yen, the
greenback edged down to 112.35. Continuation of the greenback's
downtrend may see it challenging support around the 111.00
area.
The greenback fell back to 1.1471 against the euro, heading to
pierce its early 5-day low of 1.1475. On the downside, 1.16 is
likely seen as the next support level for the greenback.
Final data from Eurostat showed that Eurozone inflation slowed
to a 6-month low in June as estimated.
Inflation eased slightly to 1.3 percent in June from 1.4 percent
in May. The rate came in line with the flash estimate published on
June 30.
Extending early fall, the greenback slipped to more than a
14-month low of 1.2635 against the loonie and more than a 2-year
low of 0.7838 against the aussie. Continuation of the greenback's
downtrend may see it challenging support around 1.25 against the
loonie and 0.80 against the aussie.
The greenback retreated to 0.7345 against the kiwi, from an
early high of 0.7317. The next possible support for the greenback
is seen around the 0.75 region.
On the flip side, the greenback was trading in a positive
territory against the pound with the pair trading at 1.3069. This
may be compared to a low of 1.3113 hit at 7:00 pm ET. The greenback
is likely to find 1.30 as the next resistance level.
Survey from the Confederation of British Industry showed that
British firms said 'Brexit' has affected their investment
decisions.
Over 40 percent of respondents said 'Brexit' influenced their
decision and 98 percent of them said that the impact has been
negative.
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