U.S. Dollar Depreciates As Fed Rate Hike Worries Abate
July 05 2021 - 3:06AM
RTTF2
The U.S. dollar moved down against its major counterparts in the
European session on Monday, as last week's mixed U.S. employment
data soothed jitters about a tapering of the bond buying program
soon.
While U.S. nonfarm payrolls rose more than expected in June, the
unemployment rate edged up unexpectedly, helping ease worries about
an immediate withdrawal of the Fed's stimulus measures.
Traders are awaiting the minutes from the Fed's June policy
meeting due on Wednesday for more clues about the policy
outlook.
The minutes could offer more clarity on the central bank's
discussions on tapering its quantitative easing program.
The June meeting surprised markets by signaling two rate hikes
in 2023 and the start of a discussion about the process of paring
back bond purchases.
Apart from the Fed's minutes, this week's economic docket
highlights ISM non-manufacturing PMI due on Tuesday and the initial
jobless claims to be published on Thursday.
The U.S. markets will remain closed today on account of the
Independence Day holiday.
The greenback slipped to 5-day lows of 1.3860 against the pound
and 110.80 against the yen, reversing from its early highs of
1.3817 and 111.19, respectively. The next possible support for the
greenback is seen around 1.40 against the pound and 108.00 against
the yen.
The greenback touched a 4-day low of 1.1880 against the euro,
down from a high of 1.1851 seen at 12 am ET. The greenback may
locate support around the 1.20 level.
The greenback reached as low as 0.9202 against the franc,
falling from a high of 0.9233 set at 3:25 am ET. The greenback is
poised to challenge support around the 0.90 mark.
The greenback hit 0.7537 against the aussie, its lowest level
since June 29. Should the greenback falls further, it is likely to
test support around the 0.78 region.
Data from the Australian Bureau of Statistics showed that
Australia's building approvals declined more than expected in
May.
The number of dwellings approved decreased 7.1 percent on a
yearly basis in May, following a 5.7 percent decline in April.
Economists had forecast a fall of 5 percent.
The greenback remained lower at 0.7032 against the kiwi, near
where it ended deals on Friday. The greenback may seek support
around the 0.72 region, if it drops again.
On the other hand, the greenback rebounded from an early 1-week
low of 1.2308 against the loonie, with the pair trading at 1.2355.
The greenback is seen finding resistance around the 1.25 level.
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