U.S. Dollar Falls On Rate Cut Hopes
October 25 2019 - 4:44AM
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The U.S. dollar traded lower against its most major counterparts
in the European session on Friday, as weak existing home sales and
durable goods orders data released overnight raised expectations
that the Federal Reserve would cut rates next week.
The U.S. durable goods orders fell more than expected in
September and shipments also declined.
U.S. new home sales pulled back in September, falling 0.7
percent to a seasonally adjusted 701,000 units.
The data supported hopes of a rate cut by the Federal Reserve
for a third time this year.
Markets widely expect the Fed to reduce interest rates by a
quarter-point, taking it to 1.5 percent to 1.75 percent.
On the trade front, hopes faded for a resolution to the
Sino-U.S. trade dispute after U.S. Vice President Mike Pence
adopted a hard line in a speech Thursday laying out President
Donald Trump's China policies and reiterating U.S. support for
protesters in Hong Kong.
China hit back at Pence's criticism, accusing of lying and
chiding him for disregarding American problems like racism and
wealth disparity.
The currency showed mixed trading against its major counterparts
in the Asian session. While it was steady against the pound and the
euro, it rose against the yen and the franc.
The greenback depreciated to 0.9907 against the franc, from an
8-day high of 0.9931 seen at 12:15 am ET. On the downside, 0.96 is
possibly seen as the next support level for the greenback.
The greenback reversed from an early high of 108.70 against the
yen, dropping to 108.55. The next possible support for the
greenback is seen around the 106.00 mark.
The U.S. currency weakened to 1.1123 against the euro and held
steady thereafter. At yesterday's close, the pair was worth
1.1104.
Survey data from the market research group GfK showed that
German consumer confidence is set to weaken to a three-year low in
November.
The forward-looking consumer sentiment index fell to 9.6 in
November from revised 9.8 in October. The expected score was 9.8.
signs of weakness.
The greenback eased off to 1.3058 against the loonie and 0.6834
against the aussie, from its early high of 1.3077 and an 8-day high
of 0.6809, respectively. The currency is seen finding support
around 1.28 against the loonie and 0.71 against the aussie.
On the other side, the greenback hit a weekly high of 0.6356
against the kiwi from yesterday's closing value of 0.6383. Next key
resistance for the greenback is likely seen around the 0.62
level.
The greenback reached as high as 1.2815 against the pound, up
from a low of 1.2862 it touched at 3:00 am ET. The greenback is
likely to find resistance around the 1.27 mark.
The University of Michigan's consumer sentiment index for
October is scheduled for release in the New York session.
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